After China’s decision to ban raising money through all forms of digital currency, it is not South Korea’s turn. Following China’s footsteps, the South Korean have put a halt on raising funds using digital currency, according to Reuters.
The Bank of Korea and the National Tax Service after a meeting with the finance ministry, in a statement, said – “Raising funds through ICOs seem to be on the rise globally, and our assessment is that ICOs are increasing in South Korea as well”
Earlier TechCrunch had reported, businesses around the globe have raised over $1.8 billion this year using the method known as initial coin offering or ICO. It’s a convenient way to gather funding for various products, but it’s not regulated and could easily be used to scam millions out of investors.
The digital currency is popular amongst netizen entrepreneurs but people could take advantage of the tool to sell products that don’t exist or collect money for a project that will never materialize. The growing number of ICOs in the country was the cause of concern and alarmed the South Korean government. The South Korean authorities also made it clear anyone involved in ICO’s will face “stern penalties”, told the Reuters correspondent, though no elaborate explanation on what kind of penalties people who break the new rule will face was given.