On Wednesday, South Korea's Financial Services Commission asked traders to be careful with investments in crypto funds.
As the message reads, crypto funds are very similar to share investment fund, and thus investors can be wrong when considering them as the legal investment tools guided and regulated by Capital Markets Act effective in South Korea.
Specifically, funds that lure investors must pass FSC certification, whereas funds dealing with cryptos are said not to have the corresponding registration, which means that they break the current law.
In this situation, it is expected that the regulator will develop regulation for crypto funds following the consulting with the corresponding bodies. FSC aims to protect players from the losses that can be suffered from such activities.
FSC has focused on the blockchain and crypto industries lately. In particular, the authorities checked some crypto funds last week. The inspection covered Zeniex-run fund, and its case can be passed to the prosecution office, as the report reads.
Besides, the new body Financial Innovation Bureau was set up by the Financial Services Commission as a part of the restructuring programme this summer. The unit will develop policies for local blockchain and fintech sectors.