Bitcoin and Ethereum are down again after South Korea banned Initial Coin Offerings

 
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Bitcoin is sliding again on the news that South Korea is clamping down (Source: Getty)

Cryptocurrencies Bitcoin and Ethereum took another hit today after South Korean authorities said they will ban all initial coin offerings (ICOs).

The Financial Services Commission (FSC) indicated a harder line on all virtual currencies in its decision, saying that companies could meet with "stern penalties" for failing to comply with rules.

"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, according to Reuters

“There is a situation where money has been flooded into an unproductive and speculative direction,” FSC vice chairman Kim Yong-beom added, according to national news agency Yonhap.

Bitcoin was down 2.81 per cent today at $4,067.51, losing some of the value it had recovered since hitting a three week low after JPMorgan Chase boss Jamie Dimon called cryptocurrencies "fraud".

Ethereum dropped 5.27 per cent to $286.68.

The action in North Korea follows a similar lean towards tighter controls in China, as regulators in other countries including the UK weigh up whether to clamp down on raising money through digital currency raises.

Read more: DEBATE: Should the FCA ban ICOs?

Bitcoin smashed through the $5,000 barrier at the beginning of this month, but it has since been volatile as regulators and financial services bosses express increasing unease about cryptocurrencies.

Read more: Bitcoin fund withdraws US exchange application

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