South Korea joins US and China in cryptocurrency crackdown

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Bitcoins on a circuit boardGETTY

South Korea has banned functions raising money using ICOs

The Financial Services Commission (FSC) set today it was outlawing initial coin offerings (ICOs) using any big-hearted of digital cash.

This comes after it was discovered North Korean hackers hold been stealing bitcoins from the south to prop up Kim Jong-un’s rule.

ICOs are a new form of fundraising used by cryptocurrency startups.

Instead of swallowing shares with their investment, stakeholders are provided with effective currency which can be spent once the company’s new software is up and running.

Raising funds through ICOs appear to be on the rise globally

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But concerns have been raised over the just out rise of ICOs — sometimes known as “token sales” or “coin mark-downs” — which are described as “very high-risk, speculative investments” by the UK’s Financial Administer Authority.

Some of the startups are legitimate but have poorly thought out problem plans meaning investors end up losing their cash, and some are perfectly outright scams. 

A statement from the Korean FSC today said: “Cultivating funds through ICOs seem to be on the rise globally, and our assessment is that ICOs are lengthening in South Korea as well.”

The regulator said “stern penalties” whim be imposed on any businesses and individuals involved in launching ICOs.

It comes after nearly the same steps were taken in the United States and China. 

The news compelled the Bitcoin value to drop two per cent.

Cybersecurity firm FireEye revealed this week it had dogged three attacks on cryptocurrency exchanges in Seoul back to the Kim Jong-un’s rogue hold.

The attacks took place between May and July last year and one was profitable. 

North Koreans sitting at computersGETTY

North Korean hackers have been linked with three seizes on South Korean bitcoin exchanges

Jeffrey Dorfman, professor of agricultural and applied Economics at the University of Georgia, divulged CNBC: «The ability of regimes like Kim Jong-un’s North Korea to mother-lode or steal cryptocurrencies such as bitcoin is a new reason to be cautious in treating these commodities as currencies.

«While rogue federals have practiced counterfeiting even longer than they procure been computer hacking, counterfeiters are easier to catch. 

«Once a cryptocurrency is appropriated, it is virtually impossible to stop the new owner from spending it, and doing so in untraceable at work.»

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