South Korea Considering to Reverse ICO Ban
If the latest news from Korean Peninsula is to be believed, the country may lift the ban on initial coin offerings (ICO). Roughly six months after banning the token sales, South Korean regulators are seriously discussing the possibility of allowing cryptocurrency investments, but with certain conditions.
As we have covered on this website before, South Korea’s financial regulator had banned the initial coin offerings in September last year. The country, citing concerns about frauds and money-laundering, banned the token sale to protect domestic investors from any loss. The restrictions were announced weeks after China’s blanket ban on cryptocurrency and trading on its soil.
In a recent report, a Korean media outlet has suggested that Korean financial authorities are in the process of formulating a plan to allow ICOs for domestic investors, though it will have certain strict conditions.
“The financial authorities have been talking to the country’s tax agency, justice ministry and other relevant government offices about a plan to allow ICOs in Korea when certain conditions are met,” reported the Korea Times.
If the plan goes ahead, as the story suggests, it will be a unique policy U-turn coming just six months after the ban. While it is yet to be determined what has motivated the move, a lot of this has to do with growing popularity of cryptocurrencies in South Korea, and new developments in Blockchain technology. The government is also studying the possibilities of using emerging Blockchain technologies to introduce innovative financial products.
However, Kang Young-soo, an official with Financial Services Commission (FSC) stated that his department has not made a formal call on allowing domestic investors and companies to conduct or participate in ICOs.
According to him, “There are many speculating about the possibility of allowing ICOs. The FSC has acknowledged a third-party view regarding the issue, but there’s nothing that we can say officially at the moment.”
Earlier, the vice chairman of FSC has hinted at backtracking from the ban and allowing institutional investors to take part in token sales. He believes that common citizens (for the time being) cannot be allowed to invest as they are not very well-informed about the complexities and technology involved. However, the Korean Times report suggests that the upcoming regulations are meant to allow individual as well as institutional investors to take part in ICOs – but only if they are compliant with the new guideliens.
Regulatory bodies have been skeptical about cryptocurrencies for quite a long time. Governments are concerned that digital assets could be used for money-laundering and fraud – and these fears were endorsed amid growing incidents of hacking, the sudden disappearance of some crypto-startups, and high incidence of fraud. As a result, certain countries like China and Korea took an extreme approach.
Finally, if the reversal happens, it will be very good news for domestic and international startups who aspire to capitalize on growing cryptocurrency adoption in Korea and raise funds for their projects. Moreover, it may also allow the country to become a model of using Blockchain technology in government services.
If you are in the cryptocurrency business, or a startup that aspires to raise funding, get in touch with us. We help entrepreneurs utilize the power of Blockchain, and help in conducting initial coin offerings (ICO) and lot more. Get in touch, to learn more!