South Korea has imitated China and similarly have placed a ban on all “initial coin offerings” (ICOs). The Financial Services Commission of South Korea has on Friday, 29th September 2017 decided to place a ban on any form of a cryptocurrency-based fundraising event, in their statement, stating that they have “serious feelings about the fact that the present market money is being forced into a non-resulting speculation direction.” This action which has been one of the key use cases of the unconsolidated blockchain has been reported earlier on this month to have caused a tumble in the price of the digital money – ETH after the announcement made by China and South Korea.
The regulators of this action have referred to similar actions from the United States, China, and regulators in Singapore to correct the runaway nature of the current market.
What is ICOs? And How does ICOs work?
Over the years, ICOs have been one of the trendy ways of raising funds even till 2017, which has successfully recorded a total number of accumulated $2 billion funds currently, with this method. according to Coindesk ICO tracker data Before now, ICOs have proven to be an efficient source where established enterprises raise their funds by paying new online currencies similar to Bitcoin.
Nevertheless, these new currencies which are like 800 in number are very flexible which sees investors having a minimal access linked to their investments.
South Korea’s Financial Services Commission once again added that they have a great concern for the “side defects like the growth in the risk of fraudulent transactions” and also the “overcrowding in the market as a result of the increase in the speculative demand.”
South Korea’s regulator also announced on Friday the curbing of the margin trading in the cryptocurrency world, where systems permit investors to invest digital currencies using borrowed funds.