In South Korea, the ban on ICOICO
(Initial Coin Offerings) is an acronym, which means a primary currency offer. Details will not be lifted, since such activities are associated with "high risks" and do not comply with legal regulations, as reported by the CoinTelegraph news agency.
Representatives of South Korea’s financial regulators said they would not lift the ban on Initial coin offering (ICO), as it was found that some projects violate laws. According to the Financial Services Commission (FSC), investment ICOs are "high risk" activities.
South Korean ICO – regulator ban
As it became known from the statement, the FSC decision was based on the results of a study conducted by the Financial Supervisory Service (FSS). The results showed that some ICOs (allegedly conducted abroad) also illegally collected money from Korean investors.
Back in September 2018, the FSS sent a questionnaire to 22 local crypto-firms that conducted ICOs in foreign countries, 13 of which sent replies. According to the FSS report, companies have been conducting ICO since the second half of 2017, collecting a total of about 566.5 billion won (more than $ 509 million).
The study showed that firms created "paper", "documentary" companies in Singapore to circumvent the ICO ban in the country. But ultimately, the potential investors were the Koreans, as evidenced by official documents and marketing and promotional materials in Korean.
Some ICO projects also did not disclose necessary information for investors: company profile and financial reports. In 18% of cases, according to a study, companies provided investors with false information.
According to the results of the study, the risk for investors was considered "high". In South Korea, bans on ICO will be extended. Recall that in November last year, South Korean legislative and regulatory bodies promised to reconsider their attitude to cryptocurrencies and ICO.
Editor: Alyona Nabok