Korean Financial Watchdog Probes Blockchain Companies Over ICO Activity

The South Korean financial authorities are contacting many blockchain companies from the country as part of an effort to investigate Initial Coin Offerings (ICOs) in the country. According to reports from local media outlets, the probe is causing many companies to be concerned as they could be sanctioned if it is considered that they broke the laws when having their sales.

While ICOs are technically not allowed in the country since token-based funding has been banned from about a year, many companies used it to get funds last year and some are having ICOs in other countries right now. The Financial Supervisory Service (FSS) has already sent letters to many companies asking for their cooperation in the case.

The Questionnaire

The questionnaire created by the company consists of about 52 questions that require specific information about the companies. This information is linked to the shareholder status in the company, countries in which companies are having ICOs, how many tokens were sent to local residents and the reasons for conducting an ICO in another country.

Part of the reason that the FSS is conducting the test is to clamp down on token sales and it intends to discover how the contracts are made, the business plan of the companies and the content of their white paper (if they have it).

The FSS has affirmed that this is not necessarily for sanctions but to find a way to provide a system for ICOs since the companies in the country keep doing them. The officials state that they are trying to create a regulatory framework that will help the situation.

Most companies are skeptical about the intentions behind the investigation and expressed unease that the investigation might disclose information about them that is not normally open to the public.

This post was originally published here