Ethereum price (ETH/USD): South Korea issues ban on ICOs
South Korea’s Financial Services Commission announced on Friday that all kinds of initial coin offerings would be banned in the country, Reuters has reported.
In a statement issued after a meeting with the finance ministry, the Bank of Korea and the National Tax Service, the country’s financial watchdog pointed to the rising popularity of ICOs, adding that the fundraising mechanism would be banned as trading of virtual currencies needed to be controlled and monitored.
“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 FSC said in the statement. It also warned that there would be “stern penalties” for financial institutions and other parties, involved in the issuance of ICOs.
According to the Reuters report, the decision was made as the South Korean government sees such issues as increasing the risk of financial scams. The FSC also added that the government would continue to monitor digital currency markets to see if additional regulations are needed.
South Korea’s ICO ban follows a similar development in China, where the fundraising method was also outlawed. It was subsequently reported that the local regulators ordered Chinese cryptocurrency exchanges to shut down their trading operations.
China’s regulatory actions threw the cryptocurrency market into turmoil, prompting a large selloff earlier this month. Today’s announcement appears to have had a similar, albeit less pronounced, effect on the market. Most cryptocurrencies have posted significant losses in today’s trading, with Bitcoin (BTC), falling 3% over the past 24 hours.
Ethereum (ETH), which is the most popular platform for initial coin offerings, have also seen a significant drop. According to data from cryptocurrency tracker Coinmarketcap, the second-largest digital currency has lost 5.1% over the past 24 hours.
In today’s trading, the Ethereum price (ETH/USD) stood at $287.31, as of 11:10 BST. The cryptocoin’s market capitalisation currently stands at $27.2 billion.
For further information on how to buy and trade Ethereum, see our comprehensive Ethereum guide.