What has happened?
The South Korean markets regulator has issued a warning about investing in cryptocurrency funds.
What does this mean?
The Financial Services Commission (FSC) has released a note to investors, in which it says that virtual currency funds have a similar structure to mutual funds and investors may therefore mistakenly assume that such funds are legal in the country under the Capital Markets Act (CMA).
Under the CMA, all funds must register with the FSC and meet its requirements.
A fund that raises capital from the public must also submit a securities report.
However, cryptocurrency funds are not approved or registered with the regulator.
"Therefore, 'virtual currency funds' are subject to Capital Markets Act violation," the FSC said.
The FSC further said that it consult with "relevant authorities" before reviewing additional measures in respect of cryptocurrency funds, with the aim to protect investors.
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