ASIC issues regulatory guidance on ICOs

Chinese flag on wall

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

The Financial Services Commission said all kinds of initial coin offerings (ICOs) will be banned in South Korea as trading in virtual currencies needs to be tightly controlled and monitored. He advised industry players that "If it is a normal company with technology, it can raise money through transparent methods such as stock openings and crowdfunding".

"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.

The announcement triggered a sell-off in crypto markets.

After Beijing banned ICOs in early September, the price of bitcoin dropped more than 25 percent from its record high of $5,000. It plans to usesmart contracts on the Ethereum blockchain to pair up buyers and sellers automatically, eliminating the need for a central authority to match trades.

Japanese Government Approves Cryptocurrency Exchanges

According to Ms. Szetho, an ICO is a nuanced subject matter when it comes to regulatory provisions because they could potentially be classified as one of a variety of financial instruments, depending on how the tokens are designed. "That's why the price of ether is susceptible".

South Korea notes that the ban doesn't mean it accepts the trading of cryptocurrencies within the financial market. Today, Japan's Financial Services Agency announced that it granted permissions to 11 different companies to operate as cryptocurrency exchanges.

Yesterday's release of the Australian securities regulator's guidance framework for initial coin offerings (ICOs) could be is an important step forward for startups looking to crowd-fund a project using digital currencies, and could help further worldwide regulatory discussions on the issue.

But several regulatory bodies, including those in the U.S., China, Hong Kong, Singapore and Russian Federation, have recently warned that lack of regulations has turned ICOs into a playground for scammers.




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