Initial Coin Offerings Likely to be Legalized in South Korea, Lawmakers Draft the Bill

04. May 2018 Posted by Akolkar B on News

South Korean lawmakers and regulators from the country’s ruling party - the Democratic Party of Korea - are now working on drafting a bill that will give Initial Coin Offerings a legal status. According to the latest report by the local news outlet The Korea Times, Rep. Hong Eui-rak will be leading the team of legislators in order to reverse the government ban on ICOs implemented last year, in September 2017.

On Wednesday, May 2nd, during a recent speech at a forum for ICOs and blockchain technology at the National Assembly Hong said: “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 further added that “The bill is aimed at legalizing ICOs under the government’s supervision” while emphasizing that “The primary goal [of the legislation] is helping remove uncertainties facing blockchain-related businesses.”

Hong said that the bill has been drafted a collaborative research conducted by his office and the Korea International Trade Association (KITA). The bill also notes that Initial Coin Offerings initiated by public organizations and research centers will be committed to promoting the blockchain technology.

However, for all these ICOs to function properly, the bill must also undergo through the strict supervision of Korea’s regulatory watchdog the Financial Services Commission (FSC) and the Ministry of Science and Information and Communications Technology (ICT).

If the bill is passed, it will end the eight-month-long ban on ICOs which the country took soon following China’s decision. Following the ban, several domestic companies of South Korea considered moving their operation abroad to other crypto-friendly locations like Japan, Switzerland, Singapore and HongKong. Just two weeks back, a new report suggested that Singapore and HongKong have been the most preferred destinations for crypto businesses to launch their ICOs.

However, the FSC chairman - FSC Chairman Choi Jong-ku - has made it clear that regardless of where the ICOs are based, if they want Korean investors to participate, they will need to undergo through the domestic regulatory process. A similar step was recently initiated by Australia’s regulatory watchdog ASIC for overseas ICOs.

Moreover, another speaker of the National Assembly - Chung Sye-kyun - have specified the role of the lawmakers to curb the bureaucratic uncertainties surrounding digital currencies and blockchain technology. He said: "Blockchain and cryptos can be used in various public sectors for good causes. Given their potential, we need to work to help reduce political uncertainties they face."