The Wall Street Journal reports that the country's Justice of Ministry might even propose legislation that would shut down exchanges nationwide, but details about how or when that would happen weren't provided. This is the latest step by South Korea to reign in the frenzy over cryptocurrencies. In September, it banned initial coin offerings.

While interest in cryptocurrencies like bitcoin have surged this year, there's a hefty amount of volatility in the crypto market, which is a risk that the South Korean government is trying to cull with regulation. This month, bitcoin's price hit an all-time high that approached the $20,000 mark after starting the year around $1,000. And along with large price fluctuations, some cryptocurrency exchanges have also been hit with major hacks -- South Korean exchange Youbit filed for bankruptcy after losing $35 million to a hack earlier this month and $72 million in a hack that took place in April.

In its statement today, the South Korean government warned that cryptocurrencies could be "vulnerable to the damage from investment fraud or hacking attacks on exchanges" and Prime Minister Lee Nak-yeon said they could "lead to some serious distorted or pathological phenomenon."