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The South Korean financial authorities are investigating 20 publicly listed companies for unfairly using cryptocurrency claims to boost their share prices. Crypto-related companies do not always follow through with their plans after seeing their share prices surge.
Also read:Â Indians Look to Buy Bitcoin Overseas as Regulations Tighten
Investigating 20 Companies
The South Korean Financial Supervisory Service (FSS) has been investigating 20 crypto-related companies listed on the countryâs stock exchange, Kosdaq, for unfair practices, local media reported.
The countryâs financial authorities have also issued a warning to investors âthat a number of unfair trade transactions were found in so-called âvirtual currency-related stocksâ in the stock market,â Yonhap detailed. The Korean Banker elaborated:
There has been a frenzy of virtual currency related stocks in the stock marketâŠMany listed companies have announced related business plans such as [launching] virtual currency exchanges and so-called âvirtual currency themesâ. The share price of the virtual currency stock surged due to the announcement of the business plan.
Among the schemes used are the establishment of crypto exchanges and the announcements of initial coin offerings (ICOs).
âMany companies have published virtual currency-related business plans through disclosure and media, but in reality, there are many cases in which the business is delayed or the business is uncertain,â Business Post conveyed.
Crypto-Related Companies
Currently, South Korean companies that have crypto-related businesses âinclude Mgame, CTL Inc, Woori Technology Investment, SCI Credit Rating & Information, Hanbitsoft, Fourthlink, Makus, and Igis System,â Ddaily detailed.
However, the financial authority did not disclose the names of the listed companies it is investigating. An FSS official explained that this is âbecause of market stabilization,â emphasizing that the companiesâ names are not disclosed because it would âdirectly affects the stock priceâ of each company involved.
Continued Monitoring
The FSS said that it will continue to monitor and sanction companies unfairly using cryptocurrencies to boost their shares. âIn the future, we will take serious measures against unfair trading in stocks, which [we] will promptly investigate virtual currency-related stocks that are likely to be unfairly traded and cause damage to a large number of investors,â the news outlet detailed.
Lee Seung-woo, Chairman of the Korea Deposit Insurance Corp and former Vice-Chairman of the FSS, commented:
Although the number of virtual currency-related shares has recently increased sharplyâŠit is difficult to say that all of them are related to virtual currencyâŠWe will conduct a full-scale investigation into the presence of unfair exchange practices among the 20 related stocks surveyed and plan to increase the number of such surveys in the future.
What do you think of the Korean regulator investigating publicly traded companies with crypto claims? Do you think many more companies are using cryptocurrency to boost their share prices? Let us know in the comments section below.
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The post Korea Investigates 20 Public Companies for Using Crypto Claims to Boost Share Prices appeared first on Bitcoin News.
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