Categories: ControversyGlobalICOICO ScamNewsRegulation

The Korea M&A Center Unveils ESC LOCK Service Aimed At Making ICOs Safer

South Korea’s M&A Center has unveiled a new financial model called ESC LOCK which is aimed at protecting Initial Coin Offering (ICOS) investors from scams.

ESC LOCK incorporates the same escrow system used in financial markets into ICOs. The result is a solution that locks the cryptocurrency provided by the ICO firm as well as the funds from the investors. ESC LOCK provides the invested funds to the ICO firm only after various conditions are fulfilled. It also makes sure that investors get back their money if the conditions are not fulfilled, thus limiting investor loss.

The new solution requires ICO firms to be listed on an exchange six months after the launch of an ICO before the investment can be deposited. They are also required to have more than 50 percent of the escrow amount via a standard ICO and should also maintain a fixed price one month after being listed. So far, there are about 30 foreign and Korean exchanges that recognize ICO listings. These exchanges have been acknowledged by the review committee for ESC LOCK.

Other than the conditions mentioned above, investors will also have more options such as monitoring business and development progress which will allow them to secure their investments. Ethereum (ETH) is one of the cryptocurrencies preferred in ICOs. The Korea M&A Center revealed that once Ethereum is invested, it will be immediately converted to cash and sent to a bank escrow account. This is aimed at overcoming the risks and damages that are associated with price fluctuations. It will also allow investors to receive returns on the invested Ethereum even if the price drops or the ICO fails.

Investor protection has been the focus of governments and regulatory authority and it is the reason behind cryptocurrency bans in countries such as China. ICOs have particularly been viewed as a new and interesting way for blockchain startups to raise capital. However, there has been inadequate regulation to protect users, and as a result, scammers have been taking advantage to make a quick buck.

A recent ICO scam in Vietnam had attracted 32,000 investors who had contributed roughly $660 million USD. This is just one of the many ICO scams through which investors have lost a ton of money. ESC LOCK is one solution that has been created to make ICOs safer for investors. This will most likely encourage more investors to jump on board.

David Pena

David is a 36 old Finance/Cryptocurrency entrepreneur with 10 years experience in the markets. He currently resides in South Florida. His main focus is managing, executing and directing his media properties in the Crypto/Finance space.

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David Pena

Tags: ESC LOCKethereumICOs

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