I think they can not ban it all because Crypto is a trend in the world and everyone wants to apply in the future. For me Korea is trying to take the best measures to prevent corruption and minimize risk for investors.
South korea thinks bitcoin is just a joke and is just manipulating the price of bitcoin that is why many are being interested on it. They don't believe that bitcoin price is increasing because the demands is continuously increasing, they just thought that someone has large number of btc and that person/s is/are manipulating its price for their own sake.