Blockchain Firms Being Probed By Korean Financial Watchdog Over ICO Activity

Blockchain companies in South Korea have come under the radar of Korean financial authorities as part of extended efforts to investigate ICO activity in the country. A report from CoinDeskKorea shows that the Financial Supervisory Service (FSS) has sent to different blockchain companies asking them to cooperate with the ongoing investigation.

The FSS operates under the supervision and guidance of South Korea’s top-most regulatory body - The Financial Service Commission (FSC). This initiation of investigation has caused several blockchain firms to worry whether they would be sanctioned in case they have broken certain rules.

The FSC has released a questionnaire to get access to specific information like the shareholder status, countries where the ICO is still in progress, reasons for conducting the ICOs oversees and number of tokens given to the domestic residents in the given ICO.

In a word with the publication, the regulatory official said that this investigation is not a crackdown on token sales. Instead, they are reaching out "to understand what the contents of the contract, business plan, and white paper are, if it has any. It is not for sanctions. This is to grasp the current situation. ... It is important to look at investors' ability to report on investments, and to provide a system for ICOs.”

When asked about the possibility of introducing a regulatory framework in the ICO market, the official said: "We are trying to figure out the real situation because we cannot just ignore the issue as ICOs are going on in foreign countries.”

Back in May 2018, a report suggested that South Korea is planning to lift its ban on ICOs and give them a legal status again. This came as a part of the restructuring of the country’s regulatory norms relating to ICOs and digital currencies.

The report then noted: "The financial authorities have been talking to the country's tax agency, justice ministry and other relevant government offices about a plan to allow ICOs in Korea when certain conditions are met.”