Financial Services Commission (FSC) is a financial watchdog in South Korea. The regulator has stated that ICO ban still remains. It has become obvious after some crypto projects violated the rules.
No means no
The Financial Services Commission (FSC) said: ‘an Initial Coin Offering (ICO) investment is a high-risk activity’. The commission has warned public to exercise caution when investing in token startups.
The FSC position on this topic is a result of a survey. The Financial Supervisory Service (FSS) conducted the audit to determine whether ICO startups can be trusted. The review suggests that they cannot.
The FSS sent the survey questionnaire to 22 local firms that had conducted ICOs in foreign countries since September 2018. Only 13 of those companies responded to the questions.
To outfox the authorities
The study determined that companies tried to outsmart the ICO ban. Companies have been establishing paper firms in Singapore to disobey the rules. Yet, startups from the report still raised funds from Koreans.
Some of the firms also didn’t reveal important information about their activity to investors. Companies did not disclose their profile, financial statements, and even in some cases, they provided false information.
What’s even more interesting, the survey showed that the risk of investment was too high because the projects’ value had fallen by an average of 67.7 percent since launch. So, it seems like the ICO ban will remain for at least the next few months.
As of today, the South Korean authorities didn’t reveal their stand on Security Token Offering. STO is viewed by many as a better form of raising funds than ICO.
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