Bitcoin was one of the currencies to sink when CoinMarketCap, one of the industry's most prominent global indexes, carried out the move without any warning, resulting in a steep drop in all virtual coins they track.
An official at the Financial Supervisory Service, South Korea's top financial regulator, said closing local exchanges would represent a "very strong measure" against virtual coins and would "effectively suffocate" cryptocurrency transactions within the country.
While the community is divided over the issue of leaving Korean exchanges out of the market data, the majority criticized CMC's decision to make such a major change without prior notice. Ripple saw prices decline by as much as 30 percent.
As of Tuesday, bitcoin prices were trading at $14,700 on Coinbase's GDAX exchange, while bitcoin was trading at $21,200 on bithumb.
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However, after the Justice Ministry spoke of an impending ban (and, indeed, after the worldwide market took a huge coinciding dip), local reports from South Korea's Ministry of Strategy and Finance (MOSF, a key member of the crypto task force) said that the MOSF does not agree with the "premature statement of the Ministry of Justice about a potential cryptocurrency trading ban".
CoinMarketCap was not immediately available to comment on its move. We are working on better tools to provide users with the averages that are most relevant to them'.
However, on Sunday, the website chose to remove three Korean exchanges from its price calculations, and since Korean exchanges usually trade higher than other markets, the overall average price for each coin declined, leading many to believe that the crypto market as a whole was in a bearish trend.
'Anyone looking to take advantage of an arbitrage in South Korea needs to do it with fiat currencies'. In 2017, XRP soared 35,000 per cent, surpassing bitcoin's surge of around 1,500 per cent. "The new price is more accurate and meaningful".
Ripple is a US -based provider of blockchain-based banking payments and it created XRP to facilitate cross-border payments and institutional settlement in seconds.