Business

Paul How

South Korea position on ICOs out by November

The South Korean government will have an official position on initial coin offerings (ICOs) by the next month, even as the country’s top regulator maintains its desire to uphold the existing ban.

Local outlet The Investor reported that Office for Government Policy Coordination Chief Hong Nam-ki said at a parliamentary audit that the government was just waiting for results of a survey of local blockchain companies conducted in September by the Financial Supervisory Service.

“We have had several discussions [on ICOs]… Once the survey results are in by end-October, we plan to finalize the government’s stance,” Hong said, adding that the survey was done “as some companies are conducting or preparing for ICOs despite the ban here.”

ICOs have been prohibited in South Korea since September 2017, even as cryptocurrency exchanges have been allowed to operate. The country’s National Assembly has recommended the lifting of the ban, with an eye on coming up with a regulatory framework for cryptocurrencies in general. As things stand, South Koreans have simply availed of ICOs abroad, in lieu of local offerings.

Meanwhile, the Financial Services Commission remains dismissive of moves to once again allow ICOs, according to a report by news agency Yonhap News. FSC Chairman Choi Jong-ku said that “Although many people call for the government to allow initial coin offerings, there are still uncertainties related to such a move as well as the possibility of serious fallouts.”

Choi also said that the government wants to promote the blockchain industry, but that cryptocurrency exchanges are to continue to be strictly regulated.

Several South Korean exchanges have been the target of hackers, who have managed to take $30 million worth of cryptocurrencies from Bithumb, and about $40 million from Coinrail, just last June.

In spite of regulatory uncertainty and recent vulnerability of exchanges, the cryptocurrency trade has managed to thrive in the country. Last week, news came out that Singaporean blockchain consortium BK Global will be purchasing a majority stake in Bithumb for KRW400 billion ($354 million).

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