South Korea Urged by Private Sector to Lift ICO Ban

The South Korean government is examining an end to the country’s ban on ICO’s as it explores ways to boost its crypto economy.

S.Korea Explores ways to Boost Blockchain

The country which banned initial coin offerings (ICO’s), a popular way for fintech companies to raise capital, in September 2017 is now having another look at allowing the method to take place as it worries about falling behind in developing blockchain based fields.

According to Business Korea, during a briefing on IT and Fintech the country’s Financial Supervisory Service (FSS) announced plans to revitalize blockchain technology.

Methods talked about including attending international conferences, promoting the use of the technology for companies within the country, and by dedicating financial resources to its promotion and use. The ministry of science will contribute 4.2 billion won ($3.94 million) of its budget to support blockchain technology projects.

Private Sector Urges a Lift on ICO Ban

Market watchers in the country though are calling for a lift of the ICO ban in order to finance the development of blockchain projects in a meaningful way.

Park Sung-joon, head of the Blockchain Research Center at Seoul’s Dongguk University, said the government needs to lift the ban on ICO’s;

“An ICO is banned only in South Korea and China. The government said it will make a 14 billion won (US$13.15 million) investment to promote the technology but it is a ridiculously small amount of money considering the fact that other countries are seeking to research and develop the technology by raising hundreds of millions of won through an ICO.”

Government critics of the controversial funding method argue that it is still to early to lift the ban. Legislation examiner at the National Assembly Won Jong-hyun said, “Currently, cryptocurrency trading market is not stable. We need more time because an IPO and other confounding fund raising (sic) methods will not be able to control risks of price fluctuations.”

Despite the ban, many South Korean companies have been involved in raising money through ICO’s overseas. The Korean regulatory bodies have no permission to look into companies records for overseas funding.

South Korea is reaching out to it’s neighboring countries Japan and China to explore regulatory cooperation that could bring about a smaller ecosystem of trade within the Asian market.

While the ban on ICO’s may be lifted due to private sector pressure the ban on foreigners trading cryptocurrency within the country will remain in place as a precaution against money laundering and other cross-border crimes as reported in Business Korea.

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