After China announced its ban on domestic exchanges trading Bitcoin, South Korea is the next country that also came out with the news that it is going to ban Initial Coin Offering (ICOs).
With the popularity of ICOs going through the roof, with some estimating that the total market value of the ICO market is now $2.5 billion in funds, some governments are backing off the “craze” by imposing strict regulations on their domestic exchanges.
According to Reuters, South Korea will be banning ICOs and the method of raising money through them. The scrutiny with which the ICOs will be monitored will be very strict, as reported by their Financial Services Commission. The financial regulator shared its thoughts that the digital currencies may pose serious implications for South Korea’s regulation of money and the whole economy, as reported by Adnan Farooqui from Ubergizmo.
Ubergizmo also reported:
“Raising funds through ICOs seem to be on the rise globally, and our assessment is that ICOs are increasing in South Korea as well,” the regulator said in a statement, adding that it will issue “stern penalties” to parties or financial institutions found involved in ICOs.”
One of the greatest fears of governments and central banks is the actual scale and popularity of Bitcoin and the digital currencies among people. As some of this cryptocurrency cannot be traced and monitored properly, governments may be losing power over their economies, especially with the advancement of “cashless products” such as Ethereum, ICOs, Bitcoin, Litecoin etc.