South Korea has announced it will ban all Initial Coin Offerings (ICOs) following a similar action taken by China. According to a report in Reuters, The Financial Services Commission all ICOs will be halted and trading in cryptocurrencies, such as Bitcoin and Ethereum, must be monitored and regulated.
The regulatory officials warned that “stern penalties” would be assessed on any financial institutions or individuals engaged in issuing ICOs. Details on the specific types of penalties were not revealed.
The report was careful to clarify that the South Korean government was not implicitly accepting that trading in cryptocurrencies were an accepted part of the financial services industry. The recent actions by China included the shuttering of exchanges where cryptocurrencies could be freely transferable into other digital coin or national currencies. It was not clear if South Korean officials were inclined to take a similar action.
Trading in cryptocurrencies and the issuance of ICOs has risen dramatically in the past year. The tremendous amounts of money have been raised through ICOs estimated at about $2 billion to date. The ICO sector has also suffered from fraudulent offers thus compelling regulators to take a stand as to how they intend to regulate, or shut down, these types of securities.