South Korea to ban ICOs

Local South Korean press suggests that South Korea has just banned initial coin offerings – a process when a startup company attracts finances by issuing digital tokens available to buy for cryptocurrency. These tokens sometimes give the buyer some bonuses, but as many, including Vitalik Buterin, the founder of Ethereum, noted, the process is far from ideal.

The South Korean FSS regulative organ (Financial Supervisory Service) made this decision after the meeting of its counter-fraud team in Seoul, note News1Korea and JoonAng, the local news portals. They came to a conclusion that ICOs turn out to be fraud schemes too often and decided to ban them. As cited by Cryptocoinsnews:

“We are worried about adverse effects such as increased risk of fraud, the ICO will be prohibited in all forms.”

These were the words of Vice Chairman of the Financial Services Commission, so we can already be certain in regard that ICOs are indeed now banned. However, the following details and consequences are still unclear. Crypto Korean, the regional news portal that was the first site to report about the ban, already tells about frustration amongst South Korean traders; expect huge market fluctuations on South Korean and possibly world crypto exchanges next week.