In a much surprising move, South Korean legislators are now working to legalize Initial Coin Offerings (ICOs) in the country. South Korea was among the first nations along with China to implement a blanket ban on the functioning of ICOs, back in September 2017. Moreover, since the beginning of this year 2018, regulatory bodies in South Korean are having a huge oversight on the local crypto markets and have introduced laws necessary to mitigate the illicit activities through crypto use.
A group of lawmakers and legislators headed by Rep. Hong Eui-rak of the (ruling) Democratic Party of Korea is now looking to reverse the government’s ban on ICOs. The lawmakers are currently working on a bill in order to legalize the launch of new digital currencies through token sales or Initial coin Offerings (ICOs). The Korea Times reported that “They are working to have a bill backing the move endorsed this year.”
On Wednesday, May 2nd, during the ICO and blockchain technology forum at the National Assembly Hong said that “the bill was based on a joint study by his office and the Korea International Trade Association (KITA).”
The publication also quoted Hong saying “This is the first parliamentary challenge to the government’s ban on domestic initial coin offerings imposed late last year to cool speculative investment in digital currencies such as bitcoin.”
Hong also said that now, that the regulatory bodies and government agencies are well abreast with the functioning of the crypto market, it would be feasible to legalize ICOs under the government supervision. Hong said: “The primary goal (of the legislation) is helping remove uncertainties facing blockchain-related businesses.”
The bill clearly mentions that for any ICO to go public, it must first undergo the tight supervision by the Ministry of Science and ICT and well the country’s regulatory watchdog Financial Services Commission (FSC).
The Korea Times notes: “The bill does not seek [to legalize] unlimited ICOs, but ones initiated by public organizations and research centers committed to promoting and developing blockchain technology.”
Following the ICO ban of the last year, many crypto businesses have been finding safe havens abroad in countries like Japan, Switzerland, Singapore and HongKong. Kakao Corp and Naver have established their subsidiaries in Japan while Hyundai Group went to Switzerland to launch the ICO for its own affiliate company – Hyundai BS&C.
However, the FSC has made it clear that regardless of where the ICOs are based, it will still be mandatory for Korean companies in order to undergo through the domestic regulatory process. FSC Chairman Choi Jong-ku said that although the “current laws [in Korea] do not prohibit ICOs from abroad, it is highly likely to violate current legislation.”
A similar step has been initiated by the Australian Securities and Investments Commission (ASIC) that is business operating overseas are trying to lure Australian investors, they need to follow the Australian corporate and consumer law.