With latest regulatory developments in China and South Korea, many are concerned about cryptocurrencies future. Did regulators provoke Cryptocurrencies Black Monday?
6 September, AtoZForex – Chinese financial regulators have taken an unexpected decision in regards to the initial coin offerings (ICOs) in China. The regulators have banned all ICOs.
China and South Korea cryptocurrency regulations
According to the official statement by the People’s Bank of China and some other Chinese regulatory authorities:
- Organizations and individuals must not raise funds through ICO activities.
- Fundraising platforms must not provide trading and exchange services.
- Banks and financial institutions must not do any business related to ICO trading.
- Organisations and individuals who have completed funding through an ICO should make arrangements to repay investors.
Following this news, the South Korean cryptocurrency task force has held a meeting in order to discuss the introduction of stricter regulations for virtual currencies. Reportedly, the supervisors were also discussing the peculiarities of regulating Bitcoin. In addition, the task force comprised the South Korean central bank, some cryptocurrency companies, and financial regulators.
The Korea Fair Trade Commission and the National Tax Service also attended the meeting. Agenda of the meeting covered the strengthening of user authentication procedures at exchanges. Moreover, authorities discussed the ‘suspicious transaction reporting’ systems used at banks for deals related to virtual currencies.
The Financial Services Commission (FSC) and task force chairperson Kim Yong-beom has stated the following:
“At this point, digital currencies cannot be considered money and currency, nor financial products.”
FxPro’s view: Regulators provoke Cryptocurrencies Black Monday?
‘If the U.S. decides to regulate the market in the similar fashion, this could provoke a “Black Monday” for cryptocurrencies. Nonetheless, the world needs a country that acts as a base for ICO platforms, that is loyal to blockchain and ready to adjust legislation.
Singapore could perhaps fill this role, as the authorities intend to attract flows of funds for technical innovation and protect investor rights. However, the biggest ICO platforms still hope for adequate regulation and the opportunity to work in their home country.
Cryptocurrencies took a hit after the news. Ethereum, which is most actively used for ICOs fell significantly, with ETH/USD registering a 13.53% loss yesterday, now trading at around 287. The ripple effect could spread to all markets and may even hit the stocks of graphic card producers.’
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