Following China’s ban on Initial Coin Offerings (ICOs) last month, South Korea’s financial regulator have now followed suit and have banned local businesses from participating in ICOs.
South Korea’s Financial Services Commission now prohibits all forms of the blockchain funding method as well as margin trading of virtual currencies. They stated that they will crack down on offenders with severe penalties.
The FSC also intends to review the operations of digital currency companies, which may lead to on-site inspections and the analysis of digital currency accounts.
Arrest were recently made and companies shut down after a scan marketing fake crypto-currencies defrauded local investors.
South Korea has recently benefited for China’s ban on exchanges, with a sharp increase in crypto-currency trading, with South Korean digital currency exchanges such as Bithumb seeing a strong influx of transactions. A number of Chinese exchanges are likely to shift their operations to Japan, South Korea and Hong Kong.
Ether prices have been impacted as a result of this new ICO ban, but slightly rebounded shortly afterwards.