South Korea Will Maintain ICO Ban After Finding Token Projects Broke Rules

January 31, 2019
65 Views

South Korea’s top financial regulator has said it will not lift the ban on domestic initial coin offerings (ICOs) after finding that some projects have been violating rules.

As ICO investment is a “high risk” activity, the Financial Services Commission (FSC) said, calling on the public to exercise caution when investing in token projects, according to a report from CoinDesk Korea.

The FSC decision was informed by the results of a survey conducted by the Financial Supervisory Service (FSS), indicating that some ICOs purportedly conducted abroad had also illegally raised money from Korean investors.

From September 2018, the FSS sent the survey questionnaire 22 local firms that conducted ICOs in foreign countries, of which 13 responded. The companies had held the ICOs since the second half of 2017, raising a combined total of about 566.4 billion won ($509 million).

The research found that firms had been setting up paper companies in Singapore to circumvent the ICO ban, yet still raised money from Koreans – as evidenced by Korean language white papers and marketing materials.

Some ICO projects also did not disclose important information for investors such as company profile and financial statements, and in some cases provided false information, the survey found. The risk for investors was also deemed high because the value of the projects’ tokens had fallen by an average of 67.7 percent since launch.

The South Korean government had previously said it would make a decision in November on whether it would again allow initial coin offerings (ICOs) again in the country.

Hong Nam-ki, head of the office for government policy coordination, said in October that regulators in the country have been reviewing the topic in recent months and that the FSC survey would guide decision-making for the policy.

FSC chairman image via the FSC

https://www.coindesk.com/south-korea-will-maintain-ico-ban-after-finding-token-projects-broke-rules

You may be interested

Nearly Half of Millennials Trust Crypto More Than US Stock Market: Survey
Crypto News
22 views
Crypto News
22 views

Nearly Half of Millennials Trust Crypto More Than US Stock Market: Survey

btcethereumadmin - February 19, 2019

Image: Cryptocurrencies, GoodFreePhotos Nearly half of millennial online traders have more trust in cryptocurrencies and crypto-assets than the US stock…

Countdown Restarts Tomorrow for SEC Decision on CBOE-VanEck Bitcoin ETF
Bitcoin
56 views
Bitcoin
56 views

Countdown Restarts Tomorrow for SEC Decision on CBOE-VanEck Bitcoin ETF

btcethereumadmin - February 19, 2019

The U.S. Securities and Exchange Commission (SEC) may make an initial decision on not one, but two different bitcoin exchange-traded…

Funds in Short Positions on Bitcoin Drop to 6-Month Low
Bitcoin
27 views
Bitcoin
27 views

Funds in Short Positions on Bitcoin Drop to 6-Month Low

btcethereumadmin - February 19, 2019

The amount of money allocated to short bets against bitcoin fell to a more than 6-month low during Tuesday’s trading…

Leave a Comment

Your email address will not be published.