Only six months have passed since South Korean regulators imposed a blanket ban on ICOs. No more than a month passed since the very same government banned its officials from trading and owning cryptocurrencies. Now, a fresh report is stating that the ban on ICOs could be lifted. It is important to note that, regardless of the blanket ban, the country didn’t force companies to return ICO funds that were already raised. Moreover, its citizens are free to invest money in foreign ICOs.
ICOs, the abbreviation of Initial Coin Offerings, represent a new and popular crowdfunding mechanism for cryptocurrency projects. They bring important benefits over IPOs, the most important one being related to the relatively fewer regulatory requirements. As a result, ICOs are open to everyone willing to invest but, on the other side, they have an increased risk of fraud than their traditional counterparts.
A new report from The Korea Times cites an anonymous source saying that Financial Services Commission, South Korea’s top financial regulator, is discussing with the National Tax Service, and the Ministry of Justice about the framework that would regulate ICOs:
“The financial authorities have been talking to the country’s tax agency, justice ministry, and other relevant government offices about a plan to allow ICOs in Korea when certain conditions are met”
The source also mentioned that other measures, like value-added taxes and possible capital gains taxes on crypto investments, are on the government’s agenda.
Kang Young-soo, head of the FSC’ cryptocurrency department, responded to comments by agreeing that the FSC engaged a “third party view” but didn’t provide any other details.
On a separate occasion, Kang Young-soo admitted that the FSC is seeking opportunities to “advance blockchain-related technologies and effectively regulate crypto-trading”.
If implemented, the plan is expected to change the trend of local startups moving overseas to raise funds.
- South Korea Planning to Formally Allow ICOs
- South Korean Banks Stop Issuing Accounts for Crypto Trading, Ahead of a Ban
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