The South Korean legislature is reportedly making moves to legalize cryptocurrency Initial Coin Offerings (ICOs) in the country. This development comes less than a year after the government issued a blanket ban over the popular digital currency fundraising method. Since the start of 2018, there have been indications that the country’s government was taking a more moderate stance on the crypto market after a raft of sweeping declarations in the last quarter of 2017.
According to local media sources, the National Assembly has put in motion an official proposal to reverse the ICO ban in the country thus allowing crypto startups to conduct initial coin offering campaigns. Earlier in May, a coalition of lawmakers led by Rep. Hong Eui-rak of the ruling Democratic Party of Korea began the process of laying the groundwork for a legal basis for ICOs in South Korea. At the time, the lawmakers were collaborating with the Korea International Trade Association (KITA) to deliver a robust framework that would guide the ICO landscape in the country.
The consensus within the National Assembly is that the government isn’t moving fast enough. The 300-man legislative council has called on the government not to neglect its duties in ensuring that the country doesn’t fall behind in the race for supremacy in the blockchain technology arena. Despite the talks of easing ICO restrictions since the beginning of the year, no concrete steps have been taken. With the government failing to provide any clarity on the matter, the National Assembly has presented its proposal to the executive arm to accelerate the legalization process. The draft proposal seeks to allow ICOs under certain conditions that offer improved investor protection.
South Korea is reportedly the second largest cryptocurrency market in the world. However, the ICO ban is seen as having a severe negative impact on the country’s blockchain economy. Startups are forced to move to foreign nations like Switzerland and Singapore to carry out their ICO projects. This has led to a significant capital flight outside the shores of South Korea, a situation the lawmakers feel is unacceptable. Thus, the special committee on the fourth industrial revolution under the aegis of the country’s National Assembly finalized a motion of May 28 to reverse the ICO ban in South Korea.
Blockchain, along with other emerging technologies like Artificial Intelligence, Machine Learning, and the Internet of Things has been identified as the core drivers of the much-anticipated new digital age. The special committee on the fourth industrial revolution believes that there is a need for public-private partnership in the blockchain industry to improve the level of transparency in the cryptocurrency market. The committee also believes that:
“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.”
The move by the National Assembly will surely come as another positive development following the remarks by Yoon Suk-heun, the recently appointed FSS Governor who talked about focusing on the positive aspects of cryptocurrency.