BITCOIN’S price hit $4,200 amid news that South Korea is following China lead and banning Initial Coin Offering (ICO), as Japan has recognised 11 exchange operators.
South Korea’s regulator said fund raising through so-called token or coin sales will be banned.
So-called token or coin sales are typically pitched as a way of raising funds for projects using cryptocurrency.
ICO issuers accept bitcoin or ethereal in exchange for coins or tokens related to the firm or project raising funds – but in most cases it’s difficult to work or the value of the digital coins.
Some projects are also fraudulent.
China banned ICOs amid a wider crackdown on bitcoin and cryptocurrency.
The move led to a dramatic fall in price of bitcoin, but values have since recovered.
But South Korea has now followed suit.
The Financial Services Commission regulator said in a statement: “Raising funds through ICOs seem to be on the rise globally, and our assessment is that ICOs are increasing in South Korea as well.”
“Stern penalties” will now be slapped on any company or individuals issuing ICOs, according to the regulator.
Further measures against cryptocurrency could also be taken.
The country’s Financial Services Agency (FSA) officially recognised 11 cryptocurrency exchange operators.
One exchange operator bitFlyer said the move is turning Japan into the global hub for bitcoin.
Chief executive Yuzo Kano said: “Japan has been exploding with demand for both bitcoin trading as well as virtual currency services,” Kano said in a press release Friday.
“The FSA’s approval for bitFlyer to operate as a Registered Virtual Currency Exchange, and the agency’s openness and forward thinking regulation could not come at a better time for the blockchain space.”