South Korea joins cryptocurrency crackdown

South Korea joins cryptocurrency crackdown

Commenting on the release of the guide, ASIC commissioner John Price said in a statement, "We want to ensure innovative firms understand the regulatory framework they may be operating under and ensure they meet any obligations they may have when raising funds in Australia".

The new mechanism enables start-ups to raise money by issuing "tokens" that can appreciate in value and later be used to buy the issuer's products.

Bitcoin is a particularly sensitive issue on the Korean peninsula, where North Korea is reportedly hacking and mining the digital currency to avoid sanctions.

Some projects are also fraudulent.

China's regulatory actions threw the cryptocurrency market into turmoil, prompting a large selloff earlier this month.

Initial Coin Offerings or ICOs are no longer legal in South Korea.

The move helped convulse Bitcoin prices that had been behaving in a parabolic fashion, ultimately peaking at all-time highs.

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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.

It also warned that there would be "stern penalties" for financial institutions and other parties, involved in the issuance of ICOs.

Japan became popular in the cryptocurrency space after the famous Mt.Gox hack in 2014, where 850,000 Bitcoins were lost.

As the cryptocurrency market recovers, it is likely to see Ether returning back to the $400 region, as other cryptocurrencies bitcoin also record major gains.

The country's Financial Services Agency (FSA) officially recognised 11 cryptocurrency exchange operators.

"They saw that the best practice was just to ban it before allowing any major crisis to occur, which would have impacted a lot of retail investors there", said Thomas Glucksmann, head of marketing at Hong Kong-based bitcoin exchange Gatecoin. Most cryptocurrencies have posted significant losses in today's trading, with Bitcoin (BTC), falling 3% over the past 24 hours.

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