Initial coin offerings remain a controversial vehicle in the eyes of regulators. South Korea wants to bring this industry to the forefront in a legitimate manner. Designating a special environment” for ICOs is an option being explored by lawmakers. Until approved, initial coin offerings remain prohibited in the country.
South Korea and ICOs
The South Korean government’s prohibition of ICO activity last September was a telling decision. It shows the uncertainties associated with this way of raising money cause too many concerns. South Korea is also one of the few countries to officially outlaw such activity at this stage. Despite the negative approach, the government is still looking for ways to legitimize coin offerings. Lawmakers are exploring new methods to achieve this goal in the near future.
A new proposal seeks to introduce a “special zone” for ICOs. Other countries around the world have taken a friendlier approach to this industry over the past few months. South Korea cannot afford to be left behind in this regard. Ever since the ban was put into effect, no real tangible process has been made to address this problem. Despite numerous meetings and seminars, a viable solution remains elusive.
Earlier this week, the National Assembly touched upon initial coin offerings again. Lawmaker Jong Buyung-guk has come up with a new proposal to address the situation. In his opinion. South Korea needs to follow Gibraltar’s approach to coin offerings. A regulation-free blockchain and cryptocurrency special zone can offer many benefits. It allows for experimentation without exposing investors to most risks associated with this manner of raising funds.
Industry Continues to Grow Despite Opposition
On a global scale, initial coin offerings continue to grow in popularity. Companies continue to raise millions of dollars without suffering from these regulatory developments. As South Korea is not a part of this industry, a lot of potential capital is not entering the local economy right now. That can become a big concern as more time progresses. Jung is aware of this trend and adds:
We are planning to invite officials from government agencies and task forces related to blockchain and virtual currencies to the National Assembly in October to hold the global conference and issue a minimum declaration for ICOs. We hope that the declaration serve as a guide for countries in writing an ICO guideline that fits with their own political and economic situations.
How government officials will address ICOs in South Korea, remains unclear. A regulation-free sandbox environment makes sense on paper. It will mainly depend on how other policymakers view the industry, as well as its risks and drawbacks. Carefully evaluation the situation remains advised at this stage. Even so, ignoring this growing industry is a luxury no government can afford at this stage.
Do you think that South Korea will reverse its ban on ICOs? Why or Why not? Tell us in the comments below.
Images courtesy of Shutterstock
