A group of South Korean lawmakers is working on a bill to legalize initial coin offerings (ICOs), providing they meet certain conditions under the supervision of the government. Meanwhile, the current ICO ban in the country has driven many domestic corporations to raise capital overseas.
Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space
Bill to Legalize ICOs
Rep. Hong Eui-rak of the South Korean ruling Democratic Party “is leading the move championed by 10 other lawmakers” to legalize ICOs, the Korea Times reported. “They are working to have a bill backing the move endorsed this year.”
During the ICO and blockchain technology forum at the National Assembly on Wednesday, Hong said that “the bill was based on a joint study by his office and the Korea International Trade Association (KITA),” according to the publication. “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.” The news outlet then quoted Hong saying:
The bill is aimed at legalizing ICOs under the government’s supervision.
The lawmaker elaborated, “The primary goal [of the legislation] is helping remove uncertainties facing blockchain-related businesses.”
Not All ICOs Will Be Legalized
However, the publication emphasized that:
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.
According to the bill, approved ICOs will be subject to tight supervision by the Financial Services Commission (FSC) and the Ministry of Science and ICT, the news outlet conveyed.
South Korea banned all ICOs last year. However, the financial authorities were reportedly talking to the country’s tax agency, justice ministry, and other relevant government departments last month about a plan to allow ICOs in the country providing certain conditions are met.
Meanwhile, domestic companies have been setting up subsidiaries and launching their token sales abroad, in countries such as Singapore, Hong Kong, Switzerland, and Japan. Chat app operators Kakao Corp and Naver, for example, have set up subsidiaries in Japan. Hyundai BS&C, an affiliate of Hyundai Group, launched its ICOs in Switzerland. Recently, one of the country’s largest crypto exchanges, Bithumb, also unveiled its plans to launch an ICO in Singapore.
However, the FSC has reiterated that regardless of where the ICOs are, Korean companies could still be subject to domestic regulations. While the “current laws [in Korea] do not prohibit ICOs from abroad,” FSC Chairman Choi Jong-ku emphasized, “it is highly likely to violate current legislation.”
Do you think South Korea will soon legalize ICOs? Let us know in the comments section below.
Images courtesy of Shutterstock and the South Korean FSC.
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