South Korea Warns Cryptocurrency Investors
October 25, 2018 12:01 pm
On Wednesday, FSC published a report claiming that the structure of cryptocurrencies is similar to mutual funds. Investors think that such funds are legal investments under the country’s Capital Market Act but it isn’t so.
According to law, the funds that raise capital from the public should be approved and registered with the FSC. The regulator says cryptocurrency funds in South Korea are neither approved nor registered.
The FSC said:
“Therefore, cryptocurrency funds are subject to Capital Markets Act violation.”
The commission also said that it is planning to study crypto funds after consulting with relevant authorities. The idea is to protect investors from financial harms.
The South Korean financial regulators recently researched cryptocurrency funds and investments. FSC has also scrutinized a crypto fund issued by an exchange named Zeniex. This move was taken following multiple requests made by several investors.
When it comes to the regulation, countries such as South Korea, China and India have made strict rules to control cryptocurrency related threats. Digital currency friendly countries such as Malta, Switzerland have made it easy for its citizens to invest in cryptocurrencies.
Recent reports state that U.K lawmakers are looking to introduce additional regulations in the cryptocurrency industry. They say that cryptocurrencies don’t have any inherent value and are highly risky for retail investors.
In January 2018, the South Korean government investigated six banks in the country. The investigation was conducted from January 8 to January 11 between Shinhan Bank, Industrial Bank of Korea (IBK), Woori Bank, Nonghyup Bank, Korea Development Bank (KDB), and KB Kookmin Bank. The investigation was made to track and ban the use of virtual bank accounts for anonymous trading.