Cryptocurrency on edge as South Korea bans ICOs

Jay Jacobs
September 30, 2017

On 28 September 2017, the Australian Securities and Investments Commission (ASIC) released Information Sheet 225 which provides its view on initial coin offerings (ICOs) and their application in relation to the Corporations Act 2001 (Cth).

The move puts Switzerland in line with authorities casting a sharper eye on the new crowdfunding method, which has let digital currency entrepreneurs raise millions quickly by creating and selling digital "tokens".

The commission noted that the rule will be enforced with "stern penalties".

This year, start-ups have raised more than a billion dollars in token sales and recently, a Macau gaming company said it was planning to raise half a billion dollars through an ICO. ICOs raise money for a specific project or company through the issue of a physical coin in exchange for a cryptocurrency, such as bitcoin or ether.

Korea and China are two of the fastest growing markets for cryptocurrencies.

Vitalik Buterin, co-creator and flag bearer of Ethereum, who visited Seoul earlier this week, said that "banning ICOs will definitely hamper technological development", and warned that regulations could be counterproductive at this stage of development.

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Swiss ICOs have largely been run by foundations based in Zug, Switzerland's "Crypto Valley".

"FINMA clearly states in its guidance that it supports the innovative potential of blockchain technology, but also that, depending on the structure, regulation can and should apply", Bussmann said.

President Oliver Bussmann said the association was unsurprised by FINMA's announcement.

The Australian government has introduced a bill to remove double taxation of cryptocurrencies such as bitcoin. But it then tumbled after China's ICO ban and plans to halt cryptocurrency trades on domestic exchanges, as well as JPMorgan ( JPM ) CEO Jamie Dimon's prediction that Bitcoin was destined to implode.

The risk for cryptocurrency boosters is that the Chinese and Korean decisions could become a template for the rest of the world.

For now (as time of the press) Bitcoin price has decreased around 2.84 percent in the last 24-hours (on Friday Sep 29), which is following after hitting the nearly monthly highest and retesting supports around $4,000.

Other reports by TheDailyFarc

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