South Korea having a crackdown on ICO’s
It seems that ICO’s are currently having a hard time out there. With the tremendous increase in popularity of cryptocurrencies, many fintech startups have been using Initial Coin Offerings as a way of raising funds from the open market. Moreover, due to its decentralized nature, there is no government agency or regulatory body involved directly into the process and so all fundraising takes place through direct investor participation.
However, regulatory bodies in some of the countries have now started to scrutinize this method of fundraising. Recently, c. In a statement, the regulators said :
“Raising funds through ICOs seem to be on the rise globally, and our assessment is that ICOs are increasing in South Korea as well.”
In a meeting to discuss the controls over cryptocurrency, Financial Services Commission (FSC) has outlined a policy which prohibits any form of blockchain funding or token sales “regardless of technical terminology.” Such measures have been taken in the wake of the fact that there have been highly speculative fundraising processes which the FSC states as “violation of the capital market law.” This intensive crackdown will be aimed as issuing stern warnings and penalties to all those involved in ICO offerings.
Following this ruling, South Korea is also planning to take measures that include banning on marginal trading of virtual currencies, perform on-site inspections and even analyse virtual currency accounts for user data. Additionally, it will also review the operations of existing companies.
As regulatory bodies of different countries are making their intentions clear, Ari Paul, co-founder of cryptocurrency investment firm BlockTower Capital, says :
“As you see more exchange listings and a more geographically diverse base of investors in cryptocurrency, you’re also going to have these unpleasant regulatory surprises, where individual countries crack down.”
On the positive side, Canada is showing some interest in ICO’s. Recently, Canda’s first regulated ICO, Impak Finace was launched. (Click here to read more)
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