South Korea’s Financial Services Commission (FSC) has decided to maintain its current ban on initial coin offerings (ICOs), based on the results of a recent survey and concerns that crypto firms have been bypassing the existing restrictions.
The FSC confirmed the decision in a January 30 press release that highlighted the ongoing ICO risk and how some firms have tried to circumvent the rules.
The survey used questionnaires sent to 22 South Korean firms that have reportedly conducted coin offerings overseas. Based on details provided by the 13 companies that chose to cooperate, the government concluded that firms had created “paper companies” in places like Singapore as a way to bypass their own country’s ICO ban. The government also suggests that those paper companies then targeted South Korean investors with their ICOs.
The FSC defended its risk assessment by noting that many of these companies failed to provide investors with vital information they would need to make sound investment decisions, including company profiles, financial statements, and accurate information about development teams.
The commission also noted that all but one of the 2018 ICOs they examined saw token values drop by an average of roughly 68 percent.