The Financial Services Commission (FSC) of South Korea has reiterated that ICO is banned in the country. There are findings of misinterpretation by some ICOs but the financial watchdog has reaffirmed its stand.
February 01, 2019 | AtoZ Markets – South Korea’s FSC, in a latest survey it conducted, has found out that some ICO projects misinterpreted themselves. It was discovered that some of them claimed to be fundraising abroad but had gone ahead to involve South Koreans. ICOs are banned in South Korea and the commission has nailed down this fact again in its latest statement.
How ICOs Dubiously Lure South Koreans
The ICOs have devised dirty tricks to lure South Koreans to participate in their projects. According to the FSC, these ICO projects registered in Singapore to evade South Korea’s ICO ban. Despite not registered in the country, they made their marketing materials and white papers written in Korean. The FSC also accused ICO projects of hiding important information, including their financial statements, from investors. The survey also revealed that some investors were scammed by some projects who offered false information. In conclusion, most investors are worse off now than they started as the values of the tokens of these ICOs have plummeted by 67.7% on average since they were launched. The commission also revealed that, these ICO firms were able to raise approximately $509 million since they started in the second half of 2017.
ICO Lobbies After The Ban
In September 2017, at the height of the Cryptocurrency boom, South Korea banned ICOs. At that same time, there was a sporadic rise in the number of ICOs launched daily. The Financial Supervisory Service, which stated the ban, believed ICOs are liable to risks of fraud. However, since the ban, there have been various attempts to lobby for the legalization of these funding activities.
In May 2018, South Korea parliament asked for the lifting of the ban. The lawmakers argued that domestic ICOs should be allowed in the country in as much as they adhere to the country’s investors protection policies. The call for the legalization of ICOs in the country came as a result of reports that domestic firms are fleeing to friendlier jurisdiction environments like Singapore.
Financial Service Commission Remains Unmoved
Despite all the lobbying, the FSC made it clear that chances are getting smaller that ICOs will be legalized in the country. In October 2018, the FSC chairman, Choi Jung-Ku hesitated that there are still ‘uncertainties related to such move as well as the possibility of serious fallouts”.
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