Following in China’s footsteps, South Korea has banned all ICOs.

In an announcement released today, South Korea’s Financial Service Commission stated that tighter control over cryptocurrencies is necessary, as ICOs are increasing the risk of financial scams.

It also announced that businesses issuing ICOs will face “stern penalties.”  Exactly what these “stern penalties” will entail has not been clarified.

The announcement follows reports that the country’s digital currency task force met last Sunday to discuss increasing regulations over cryptocurrency trading in general by strengthening the authentication procedures of exchanges.  Those attending the meeting included the National Tax Service and the Korea Fair Trade Commission.

Reports of Korean regulatory bodies seeking to tighten cryptocurrency regulations fall in line with similar reports regarding regulatory institutions in China, the United States, Singapore, Canada, and many others.

Perhaps more significantly, the South Korean ban also follows reports of a failed North Korean hack attempt toward several of the former’s bitcoin exchanges back during July and August of this year, thus making the control of cryptocurrency exchanges a matter of national security.

After South Korea’s announcement, Ethereum, which has increased in popularity as a platform for new cryptocurrencies, and which is used to buy into ICOs, dropped 5.7 percent.  Bitcoin, also used to buy into ICOs, fell 3.5 percent.

Though the country has confirmed its intent to delegalize ICOs, South Korea’s exact plans regarding its tightening of regulations over cryptocurrencies in the near future have yet to be specified.

Read more at: Bloomberg, Business Insider, CryptoCoinsNews, TheStreet.