South Korea bans raising money through initial coin offerings

SEOUL (Reuters) – South Korea’s financial regulator on Friday said it will ban raising money through all forms of virtual currencies, a move that follows similar restrictions in China on initial coin offerings.

The Financial Services Commission said all kinds of initial coin offerings (ICO) will be banned as trading of virtual currencies needs to be tightly controlled and monitored.

“Raising funds through ICOs seem to be on the rise globally, and our assessment is that ICOs are increasing in South Korea as well,” the regulator said in a statement after a meeting with the finance ministry, the Bank of Korea and the National Tax Service.

“Stern penalties” will be issued on financial institutions and any parties involved in issuing of ICOs, the statement added, without elaborating further on the details of those penalties.

The decision to ban ICOs as a fundraising tool was made as the government sees such issues as increasing the risk of financial scams. The decision tracks similar announcements in the U.S. and China where increasing trading volumes of cryptocurrencies are sparking concerns.

It added Friday’s announcement doesn’t mean the government has implicitly accepted trading of virtual currencies as part of its financial system, and will continue to monitor markets to see additional regulations are needed.

Reporting by Cynthia Kim; Editing by Sam Holmes

Our Standards:The Thomson Reuters Trust Principles.

Tech

Netflix Is Reportedly Planning to Launch in South Korea in January 2016

Flickr / Matthew Keys

Video-streaming service Netflix is reportedly planning to enter the South Korean market in January 2016, with an official announcement due in the coming weeks, according to a report by The Korea Times on Sunday.

Netflix only just launched in Japan last week, where it partnered with local carrier SoftBank to have its app pre-installed on phones in the country — and it looks like it may be counting on a similar strategy to navigate South Korea.

According to the newspaper, the company is “seeking to form strategic partnerships with Korean mobile carriers and leading terrestrial broadcasters.” The three largest carriers in the country are SK Telecom, KT, and LG Uplus.

Netflix seems to be locked in a fierce expansion race with rival Amazon, which offers its own video-streaming service, and recently also announced a September launch for Japan — though Amazon’s service is not yet available in South Korea.

The newspaper cited its sources as saying:

Korean carriers and broadcasters are underway to discuss licensing their content to Netflix in Korea. For Netflix, the main issue is how to cut costs in content delivery and lower its spending for network usage… Conditions in Korea are as favorable or better than they are in Japan for acceptance of Netflix’s on-demand services because the infrastructure in networks in Korea is already in place with households having easy access to broadband lines and mobile services.

And on why Netflix needs to strike deals with the South Korean carriers to succeed there:

When you see more data traffic, then Netflix will pay more for the delivery of content. However, charges of its main services were low, and that’s why Netflix needs substantial help from Korean carriers which operate networks. Netflix is on track to narrow differences over content licensing… Netflix’s advance in Korea will be helpful to local carriers to help them set up strategies in content business and also allow Korea’s media content to reach a global audience.

The sources also predict an impending doomsday for local broadcasters in South Korea — which will face growing competition from services such as Netflix and possibly Amazon — if they “fail to catch up with such changes.”

Netflix also has upcoming launch plans in a number of other markets including Italy, Portugal, Spain, Iceland, and the Czech Republic. It has previously said that it plans to be available in more than 200 countries by the end of 2016.

We’ve reached out to Netflix for comment, and will update you if we hear back.

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