Ethereum Tumbles After South Korea Bans ICOs, Margin Trading
by Tyler Durden
ZeroHedge.com
Sep 29, 2017
Ethereum and bitcoin tumbled overnight, after South Korea banned local initial coin offerings and margin trading in cryptocurrencies. According to Joongang and Bloomberg, the Financial Services Commission in Seoul said all forms of ICOs are prohibited in the country, including “projects that share profits, rights, dividends, and other “coin-style” offerings, according to a statement.”
The commission also banned margin trading, i.e., the practice of loaning funds to trade currencies including bitcoin and ethereum, according to an official who clarified the statement. The government plans to investigate any violations and deal with them strictly even before its measures are legislated, it said in the statement.
The announcement triggered a sell-off in crypto markets with Ethereum, which has become a platform for most ICOs, dropping 5.7% while bitcoin fell as much as 3.5%.
“They saw that the best practice was just to ban it before allowing any major crisis to occur, which would have impacted a lot of retail investors there,” Thomas Glucksmann, head of marketing at Hong Kong-based bitcoin exchange Gatecoin told Bloomberg. “Similar to China, they probably didn’t want to ban it, but they didn’t want to take any risk about it getting out of hand.”
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