South Korea’s Financial Services Commission (FSC) has banned raising money through initial coin offerings (ICOs) in a bid to mitigate risks in the financial system.
The ban will cover all forms of ICOs that enables entities or individuals to raise funds through cryptocurrencies, the watchdog said.
The move follows in the footsteps of Chinese regulator that declared ICOs as illegal and ordered a ban on them early this month.
FSC warned on ICOs early this month and unveiled plans to strengthen authentication processes of virtual currencies at exchanges and monitor transaction reporting systems at banks used for virtual currency-related deals.
Couple of weeks back, JPMorgan CEO Jamie Dimon called bitcoin a ‘fraud’, which will eventually blow up.
“The currency isn’t going to work. You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart,” Dimon said.
Several other regulators across the globe have also recently warned on the risk of ICOs, including UK’s Financial Conduct Authority, US Securities and Exchange Commission, and Securities and Futures Commission of Hong Kong.