Like its neighbor across the Yellow Sea, South Korea is banning a blockchain-based funding method known as “initial coin offering,” or ICO. Since the vast majority of ICOs take place on Ethereum, this qualifies as pretty terrible Ethereum news.
ETH prices may fall dramatically in response.
After all, the language of the ruling is horribly firm. The Financial Services Commission (FSC) said that token offerings are in “violation of the capital market law” and will henceforth be illegal “regardless of technical terminology.”
They also promised an “intensive crackdown” in concert with “stern penalties” to anyone involved with new ICOs.
This is deeply concerning because China’s crackdown on cryptocurrencies, which wreaked havoc on our Ethereum price prediction, started in much the same way. There were rumors of an ICO ban, followed by a real ICO ban, followed by rumors of a trading ban, followed by a crushingly real trading ban.
Is that going to happen in South Korea as well? Probably not.
Korean regulators are being more upfront with their intentions. According to their statements and reports, leveraged bets on trading currencies is a no-no and exchanges will be subject to in-person audits. But they won’t stop trading altogether.
Overall, Korea is using a heavy hand with its new guidance, but it’s stopped short of banning won to crypto trades. This should come as an immense relief to investors because Korean exchanges like Bithumb, Korbit, and Coinone are massive trading centers.
In any case, Ethereum to USD prices fell 3.17% to $290.15 in yesterday’s trading. It also depreciated 2.6% against Bitcoin.
This fall shouldn’t be as steep as what happened in China, but investors would be wise to expect a dip of some magnitude. However, we believe that the bullishness caused by the Byzantium fork will outweigh any pessimism by the end of the month. We still expect ETH prices to reach $400.00 by end of October. Beyond that timeline, we hold to our $1,000 Ethereum price forecast for early 2018.
Also Read: Hold on to Ethereum for the Long Term