The existing ICO ban in South Korea has caused many corporations in the country to raise capital overseas.
South Korean lawmakers are now working on legalizing Initial Coin Offerings (ICOs) once again. A National Assembly is also studying the new trend set forth by cryptocurrencies and is looking for a legal basis for it to be legalized in the country once again, according to a report by Business Korea.
The publication writes:
“We need to form a task force including private experts in order to improve transparency of cryptocurrency trading and establish a healthy trade order. The administration also needs to consider setting up a new committee and building governance systems at its level in a bid to systematically make blockchain policy and efficiently provide industrial support. We will also establish a legal basis for cryptocurrency trading, including permission of ICOs, through the National Assembly Standing Committee.”
Heading the move to legalize ICOs is Hong Eui-rak of the South Korean ruling Democratic Party. Hong said that the bill to legalize this is a joint effort done with the Korea International Trade Association (KITA).
“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.”
However, the bill will be under the government’s supervision, according to Hong. The intention is to help remove some of the many uncertainties that usually come with blockchain-related business models.
Scope Of Legalization
The publication stated the limitations of the legalization. Only ICOs launched by public organizations and research centers that are dedicated to developing the technology will be considered. Even then, ICOs will be subject to strict rules implemented by the Financial Services Commission (FSC) and the Ministry of Science and ICT.
The consideration to legalize ICOs once again at least serves to lighten the current burden suffered by the economy. When ICOs were first banned, the public protested and even called for government ministers to resign as soon as the year 2018 started.
Leaving the country at that state has forced the hand of domestic companies to approach Singapore and Switzerland to do their ICO businesses despite larger expenses involved – ones that would not be present should they be allowed to do this in their home country, and money that would be better spent in the South Korean economy.