A joint task force took place this weekend in South Korea addressing the burgeoning cryptocurrency market. According to a report in BusinessKorea, The Financial Supervisory Commission (FSC), the Korea Fair Trade Commission (KFTC) and the National Tax Service (NTS) came together to review digital currencies, speculation and initial coin offerings (ICOs). The goal of the task force is to strengthen procedures to eliminate acts of fraud while monitoring transactions using cryptocurrencies. Regulators are expected to introduce regulations addressing the domestic trading of cryptocurrencies, including anti-money laundering laws. Kim Yong-beom, the Vice Chairman of the FSC chaired the task force meeting.
An unnamed official from the FSC was quoted in the report;
“We will clearly state the foundations of the Act on the Regulation of Conducting Fund-Raising Business Without Permission for illegal fund-raising impersonating digital currency investment and strengthen levels of punishment. We will expand the application range of Act on the Regulation of Conducting Fund-Raising Business Without Permission and come up with regulations on digital currency trading by establishing the law.”
Regulators are poised to “punish” ICOs that are deemed securities. Yong-beom stated;
“At this point, digital currencies cannot be considered money and currency not financial products.”
The rapid rise of ICOs have caused government officials around the world to announce their intent to regulate tokenized offerings based on digital currencies. Some ICOs have raised incredible sums of money in very little time.
The US Securities and Exchange Commission announced earlier this year that ICOs that are securities will be regulated under existing exemptions. Additionally, there is legislation in Congress that may impact cryptocurrency utilization as policymakers struggle to understand and manage these new types of currencies.