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Ban Hammer Remains: South Korea’s Financial Services Commission Refuses to Lift ICO Ban

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The ban on preliminary coin choices in South Korea will keep, the rustic’s monetary regulator has stated in a statement.

The choice by way of the South Korean Financial Services Commission (FSC) follows a survey which the regulator commissioned. Among the findings of the survey come with the truth that some ICO tasks misrepresented themselves. For example, some had claimed to be fundraising in a foreign country however they went directly to contain South Koreans.

Dirty Tricks Employed to Evade ICO Ban

According to the FSC, the tasks did this by way of registering in Singapore with the intention to circumvent South Korea’s ICO ban. Some of the proof that the FSC got integrated advertising fabrics and white papers written in Korean.

The FSC has additionally accused one of the crucial tasks of concealing subject material knowledge from traders together with monetary statements and corporate profiles. From the survey, the FSC additionally concluded that some tasks additionally duped traders by way of providing false knowledge.

Since the tasks begun elevating cash, lots of the traders are worse off than they began. On reasonable the price of the tokens has declined by way of 67.7% on reasonable since being introduced.

FSC’s survey questionnaire used to be despatched to a few 22 native corporations of which 13 replied. These corporations controlled to boost roughly $509 million. The ICOs had been held beginning in the second one part of 2017.

Ban on the Height of the ICO Boom

South Korea banned ICOs in September 2017 mentioning the larger possibility of fraud. The choice used to be made by way of Financial Supervisory Service following a gathering of a cryptocurrency activity drive it had instituted. Since then there were quite a lot of makes an attempt to foyer for the legalization of the nascent investment style.

Last 12 months in May, for example, South Korea’s parliament really useful that domestic ICOs to be allowed within the nation. This used to be so long as they adhered to related investor protections.

The advice by way of South Korea’s parliament to legalize ICOs used to be according to experiences that home corporations had been fleeing to friendlier jurisdictions corresponding to Switzerland and Singapore. At the time South Korea’s parliament also known as for blockchain and cryptocurrency-friendly regulation:

The management must also imagine putting in place a brand new committee and development governance methods at its stage in a bid to systematically make blockchain coverage and successfully supply commercial improve. We can even determine a prison foundation for cryptocurrency buying and selling, together with permission of ICOs, in the course of the National Assembly Standing Committee.

The Financial Services Commission Unmoved by way of the entire ‘Lobbying’

However, because the 12 months wore on, it used to be turning into more and more transparent that the possibilities of legalizing ICOs had been rising slimmer by way of the day. Last 12 months in October, the chairman of the FSC, Choi Jong-ku, demonstrated hesitance despite the growing call for ICO legalization:

Although many of us name for the federal government to permit preliminary coin choices, there are nonetheless uncertainties associated with the sort of transfer in addition to the potential for severe fallouts.

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