South Korean Regulator FSC Issued a warning for investors in the country, stating that there is a number of misleading cryptocurrency funds operating illegally in the country.
25 October 2018 – South Korea’s Financial Services Commission (FSC) has issued a statement for the public, thus warning investors’ community to exercise caution while investing in cryptocurrency funds. The documents that were published on the official FSC website on October 24 state that investors might be misled by cryptocurrency funds.
South Korea Warns About Misleading Crypto Funds
The FSC notes that cryptocurrency funds might trick investors into mistakenly believing that those public funds represent legal investing tools that are compatible with South Korea’s Capital Markets Act.
Referring to the act, the FSC stated that the public fundraising schemes should get approval and obtain registration with the commission in order to operate legally in the country. Yet, according to the FSC, such cryptocurrency funds are not approved or registered. This implies that those companies are violating the country’s Capital Markets Act.
The Financial Services Commission also stated that it intends to hold consultations with relevant authorities in order to take action concerning cryptocurrency funds in a bid to protect investors from risks of potential financial losses.
Earlier this month, the Chairman of FSC, Choi Jong-koo has reiterated his negative position regarding digital currencies and Initial Coin Offerings (ICOs) when giving a speech at a parliamentary audit session of the National Assembly commission. He has claimed that the current turmoil around ICOs and its potential damage to investors are “too serious and obvious.” He cited other countries that banned this type of fundraising as an example.
South Korea ICO Stance
South Korea’s financial officials have prohibited all types of ICOs back in September 2017. The reasoning for such decision was that ICO token sales require too much oversight from the regulator’s side. The initial ban has been followed by the suggested for a reversal.
On October 2nd, a member of South Korea’s National Assembly called to “open up the road” to ICOs by adopting a softer stance in terms of regulations. In addition, Democratic Party lawmaker Min Byung-doo stated that the party will work on a project for ICO legislation at the next session of the National Assembly.
It is understood that South Korea is most likely to announce its official stance regarding ICOs in November.
Think we missed something? Let us know in the comments section below.