The South Korean Financial Services Commission (FSC) had warned potential investors in October to be wary of buying into unauthorized Initial Coin Offerings (ICOs) and crypto exchanges. The commission had clearly stated in September that it will be banning all kinds of ICOs, as it felt that trading of virtual currencies needed to be tightly monitored and controlled.
In its statement, the FSC had said that after having a discussion with the Finance Ministry, the National Tax Service and the Bank of Korea, they assessed that ICOs are on the rise in South Korea as well. In fact, raising funds through ICOs seems to be the trend globally. Hence, the regulatory body decided to issue stern penalties on financial institutions and any parties involved in issuing of ICOs. It, however, did not elaborate on the details of the penalties.
In continuation with the crackdown of unauthorized South Korean crypto exchanges, Zeniex becomes the latest casualty. The exchange in its official statement issued on November 9 announced that they will be terminating all their services shortly, as they lost the battle with the Korean regulatory authorities. Zeniex’s ZXG token was called out by the FSC for not registering with the nation’s crypto regulatory bodies.
As the FSC’s crackdown on unauthorized crypto exchanges thriving in the market continues, the decision to ban ICOs as a fundraising tool was taken as the government considered the latter to increase the risk of financial scams. Similar announcements were made in China and the U.S. where the increasing trading volumes of cryptocurrencies seem to be sparking concerns, as reported on Reuters.
In May this year, the FSC became another regulatory body to join the investigations being carried out on local crypto exchanges. Some of the grey areas that the FSC will be focussing upon pertain to that of anti-money laundering. This was earlier led by the Financial Supervisory Service (FSS). Kim Yong-beom, Vice Chairman of the FSC had been urging regulators across the world to be a part of this mission.
The FSC presently has the authority to verify bank accounts associated with South Korean crypto exchanges to ensure if they have been adhering to anti-money laundering standards and other prevention measures in place, as reported on Bitcoin Exchange Guide.
Crypto exchange Zeniex was a recent entry into the South Korean crypto market. Established in May 2018, it was a collaborative crypto exchange effort between South Korea and China. Zeniex was aware that issues with their token ZXG have raised concerns both externally and internally that finally culminated in the closure of the exchange. The exchange has announced that all operations on their platform will cease on November 23, as reported on CryptoGlobe.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]