The measure was taken because of the notable increase in this type of campaign in South Korean territory, which have been associated with possible large scale scams.
The South Korean Financial Services Commission (Better known as the FSC) announced today that "all kinds of campaigns for the collection of funds for digital coins are prohibited.
According to information published by the Reuters news agency, the regulator announced the halt to operations by publishing the following message:
"Any type of digital coin pre-sales (ICO) campaign will be banned, as commercial activities linked to the use of cryptones will need to be rigorously monitored and monitored."
With this announcement, the Asian country suspended until further notice all the initial pre-sales of new digital currencies, claiming that "Fundraising through the ICO campaigns seemed to be increasing internationally" which is why it was important to do a lot of supervision more rigorous on the same ones in national territory. The FSC's statements were made public after its representatives held a meeting with officials from the Ministry of Finance, the Central Bank of Korea and the National Tax Service.
"We are concerned that ICO campaigns are increasing exponentially around the world, and this is also happening in South Korea."
The Reuters news agency reported that the decision to suspend these fundraising campaigns would be underpinned by the government's view that they raise the risk of financial scams. The FSC announced that all the parties involved in the ICO that do not adhere to the opinion of the institution will be subject to severe legal sanctions.
This decision, implemented by the South Korean government, is part of the decisions taken by China, who were the first to suspend such fundraising campaigns during the first days of September, followed by the cessation of activities. Bitcoin exchange services operating in national territory. However, Korea is not taking such radical measures as China, as this measure does not contemplate the closure of digital currency exchange platforms. The Korean government will continue to monitor the markets for the criptomonedas to see if they require additional regulations.
Keep in mind that the country's authorities have intensified efforts to effectively regulate digital currencies in the country. A working group was set up in July to assess the need to implement legal and regulatory frameworks on cryptones.
It is important to consider that an amendment to the Electronic Financial Transactions Act was also proposed, which was introduced by legislator Park Yong-Jin, with the intention of providing certain regulations on digital coins. Earlier this month, the country's top financial regulators announced plans to more closely monitor criptomonedas.
Ethereum prices
No doubt, the ads made by the FSC had an effect on the performance of the digital currency, since it is the currency mainly used for the pre-sales campaigns of new digital currencies (ICO).
Moments before the announcement the digital currency was quoted at about 299 dollars per unit and then suffered a crash after the news recording a value of 283 dollars.
Fall recorded on Ethereum prices. Image taken from CoinMarketCap
However, the digital currency has begun to recover its value, since its price has been increasing progressively hours later and for the moment of writing is quoted at about 294 dollars per unit with upward trend.
Recall that the situation in Korea with the exchange services operating in the country has been quite uneven, as over the past year several of the major companies in this line of services have been victims of attacks and hacking, have carried out inspections of the undertakings concerned. The hypothesis is that North Korean hackers directly involved with the government of Kim Jong Un perpetuated these attacks in order to obtain external financing for the regime, because of the recent economic sanctions imposed by several countries the Asian nation faces a species of financial blockade, so that the digital coins would allow to somehow circumvent this panorama.
Source: News.Bitcoin.com / CryptoCoinsNews