South Korean Officials Propose Lift on ICO Ban

south korea ico ban

South Korea’s Financial Services Commission prohibited domestic companies and startups from participating in initial coin offerings back in September of last year, however, a new report citing government officials says that South Korea’s National Assembly has proposed a lift on the ban, re-legalizing ICOs as a way for startups to raise funding.

According to South Korean news publication BusinessKorea, the National Assembly’s Special Committee of the Fourth Industrial Revolution made the recommendation to lift the ban, and provide new legislation that permits ICOs so long as certain investor protections are addressed.

As part of the proposal, South Korean officials will form a task force comprised of public officials and private experts to improve transparency in the crypto market and establish healthier trade guidelines for investors. The recommendation also suggests the government set up “a new committee and building governance systems at its level in a bid to systematically make blockchain policy and efficiently provide industrial support.”

South Korea’s chief regulator the Financial Services Commission banned all forms of blockchain funding methods, “regardless of technical terminology,” including ICOs as part of an “intensive crackdown.” 

As seen in other regions, ICOs oftentimes are scams with the promises of financial gain misleading investors. A report by the Wall Street Journal showed that at least 19% of all ICOs have what they call “red flags.” The red flags Wall Street Journal lists are similar to the educational materials the SEC published through their HoweyCoins ‘fake ICO’ website, used to teach potential investors about the warning signs of a fraudulent investment opportunity.