29.09.201705:02:00UTC+00​South Korea Bans All New Digital Currency Sales

South Korea's financial regulator announced on Friday that it will illegalize the act of raising money via all forms of cryptocurrencies, making it the latest country to impose restrictions on initial coin offerings after China.

The Financial Services Commission said all kinds of ICO will be ban as exchange of digital currencies needs to be highly controlled and overseen.

South Korea's financial watchdog said that “stern penalties” will be imposed on financial institutions and parties involved in the ICO process, without giving details of the punishments.

ICOs are popularly used by firms as a means to raise cash as an alternative to the traditional venture capital business model. Start-up companies issue virtual coins that can be later utilized to buy its products. Investors also pay for the coins using digital currency.

While it is a popular mechanism, the unregulated nature of the process has raised concerns among regulators.

Earlier this month, China regulators declared ICOs illegal earlier this month, and on Thursday the Australian Securities and Investments Commission provided new guidance for ICO issuers, cautioning consumers that they must have an understanding of the potential risks and be cautious of scams. A similar warning was put ot by the UK financial watchdog on September 12.