South Korea Has Banned the Sale of All New Cryptocurrencies

Posted September 30, 2017

Until the recent bill on double taxation passed, consumers using digital currency were subjected to sales taxes upon purchase of the digital currency and then again on any use for purchase of goods and/or services.

The move came on the heels of Chinese authorities' ordering Beijing-based cryptocurrency exchanges to stop trading and immediately notify users of their closure.

South Korea will prohibit initial coin offerings, or fundraising via cryptocurrencies, making it the latest nation to crack down on the increasingly popular practice over concerns about fraud.

Korea's Financial Services Commission (FSC) has banned all forms of initial coin offerings (ICOs), Reuters reports.

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Those funds, which have not begun trading, would be listed on NYSE Arca and follow Bitcoin futures contracts traded on the Chicago Board of Options Exchange, the filing said.

"Similar to China, they probably didn't want to ban it, but they didn't want to take any risk about it getting out of hand".

"ICOs are highly speculative investments, are mostly unregulated, and the chance of losing your investment is high", ASIC commissioner John Price told the Sydney Morning Herald.

Bitcoin fell as much as 3.5%.

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ASIC also considers circumstances and implications as to when the platform making the ICO could be characterised as a financial market or fall under the new Crowd Sourced Funding regime. The harsher rules have reportedly not stopped traders from buying and selling cryptocurrencies like Bitcoin. "That's why the price of ether is susceptible".

South Korea also sees bitcoin as potentially vulnerable to North Korean hacking.

FINMA announced on Friday that it was looking into a number of ICOs for breaching "provisions on combating money laundering and terrorist financing" and other regulations.

In July, the US Securities and Exchange Commission issued a ruling that an ICO called the DAO had violated securities law.

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But several regulatory bodies, including those in the U.S., China, Hong Kong, Singapore and Russian Federation, have recently warned that lack of regulations has turned ICOs into a playground for scammers.