Cryptocurrencies across the market are plunging amid new fears that trading them could be banned.

The drop comes amid suggestions that South Korea could ban trading in cryptocurrencies entirely, or at the very least impose sweeping new regulation on the market. South Korea has become hugely invested in bitcoin, with trading becoming mainstream and helping propel the until now rocketing price of the cryptocurrency.

The new fall is affecting every cryptocurrencies – bitcoin has dropped by more than 15 per cent, and is the best performing among its competitors . But it's not the first time that South Korea has suggested it will ban cryptocurrencies, and it's not the first time that saying so has led to wild volatility in the price of bitcoin and others.

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Last week, a government minister suggested that the country ban trading in bitcoin and other cryptocurrencies. That suggestion was quickly revoked, with officials saying that less extreme regulation was likely.

But South Korea's most powerful financial policymakers has now said that a complete crackdown is still possible, and that new regulations like the use of real names will probably arrive soon.

Finance Minister Kim Dong-yeon said in an interview with local radio station TBS that banning trading in digital currencies was "a live option." He said the decision was subject to a thorough government review.

"There are no disagreements over regulating speculation," such as using real-name accounts and levying taxes on crypto currency trading, Kim said. Shutting down digital currency exchanges is "a live option but government ministries need to very seriously review it," he said.

Bitcoin was trading at $12,615.60, down 7.1 percent from the day before as of 8:03 a.m. GMT, according to Coindesk. The price of ethereum, another digital currency, had slipped 7.8 percent to $1,190.45 as of 8:04 a.m. GMT.

South Korean officials' remarks have swayed the global markets for bitcoin and other crypto currencies in the past few weeks. The country has seen a huge bitcoin craze, with young and old betting on the crypto currency to build wealth. The high demand from South Korean investors has created what investors call a "kimchi premium," the extra price the South Koreans have to pay to buy digital currencies, sold in South Korea at higher than the average global prices.

Last week, the justice minister's remark that the country will ban bitcoin and other digital currencies triggered big sell-offs and a public outcry. The presidential office then said that no final decision had been made.

An online petition on the presidential office's website has drawn more than 210,000 requests from people asking the government not to ban trading in digital currencies.

"We the citizens were able to have a happy dream that we had never had in South Korea thanks to crypto currency," the petition reads. "You may think you are protecting the public but we citizens think that the government is stealing our dream."

Additional reporting by Associated Press