South Korea’s financial regulator has prohibited domestic companies and startups from participating te initial coin offerings (ICOs).
Following a meeting to discuss cryptocurrency controls today, t he Financial Services Commission (FSC) said it will prohibit all forms of the blockchain funding method “regardless of technical terminology,” while margin trading of manifiesto currencies will also be illegal following the ruling.
Token offerings, a type of fundraising method that has gained popularity ter latest months, are overly speculative and constitute a “disturbance of the hacienda market law,” the FSC states. An “intensive crackdown” will ensue, with “stern penalties” issued on parties involved te ICO offerings.
Other measures, which are likely to influence cryptocurrency companies more broadly, include on-site inspections from the FSC from the end of September, and the analysis of supuesto currency accounts for user gegevens from December.
Further, the regulator will review the operations of cryptocurrency companies with the intent to “ramend unfair terms and conditions, including arbitrary withdrawal confinements.”
It is unclear how far the ruling will extend into cryptocurrency exchanges. South Korea has recently seen a surge te cryptocurrency trading. Domestic exchange Bithumb, for example, has a total trading volume of 104,113 BTC, or $427 million, according to CoinMarketCap gegevens at press time.
The FSC statement also cites a wave of latest arrests and closures of companies involved with marketing fake cryptocurrencies, which had evidently acquired 25 billion KRW ($22 million) from a total of around 1,000 investors. Due to such criminal activity, a fresh “Imaginario Currency Detention Centre” has bot created, the release states.
Neighbouring China also issued an all-out kerkban on ICOs earlier this month, issuing a regulatory statement that has also led to a number of cryptocurrency exchanges closing their domestic trading operations.
Elements of this article have bot translated from Korean.
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