Despite the risks associated with Initial Coin Offerings, the trend has become extremely popular in areas throughout the world. In an effort to reduce the risk of fraud, money laundering and tax avoidance, several countries have banned ICOs.
South Korea was one of these, as the Financial Services Commission, a government department in-charge with financial policies and supervision, banned domestic ICOs in September 2017. Now, recent reports indicate that the South Korean National Assembly has proposed the idea of lifting the ban placed on domestic ICOs.
In a parliament meeting held on the 28th of May, a committee went ahead and assessed the situation in the blockchain industry for the past six months. Following the observation, the committee concluded that the administration has failed to encourage blockchain innovation in South Korea. Because of this, the committee went ahead and drafted the official legislative and policy proposals, meant to lift the ICO ban.
According to the legislative proposal, investor protection will be granted to ICO investors. Additionally, domestic ICOs will have to follow several conditions, meant to increase transparency and reduce the afferent risks. The committee also asked the government to create a task force, meant to enforce transparent measures for digital currency trading activities.
In a press statement, the special committee said: “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 South Korean National Assembly will have to vote on whether the policy goes into effect. At this time, it is unknown when the vote will take place. Therefore, the decision is not yet final.
It is important to point out the fact that earlier this year, the Financial Services Commission banned digital currency trading via anonymous accounts, in an attempt to reduce crypto-related money laundering activities.
Based on everything that has been outlined so far, what are your thoughts on South Korea lifting the ban on domestic initial coin offerings? Let us know in the comment section below.