South Korea Set to Adopt Favourable ICO Stance

South Korea Set to Adopt Favourable ICO Stance

South Korean regulators have vowed to tighten regulations on cryptocurrencies while also hinting that, inversely, they may now accommodate ICOs.

In September the regulators in the country banned ICOs, citing a series of scam token sales. At the same time, they banned margin trading of cryptocurrencies but stopped short of an outright ban.

U-turn

Similar to recent changes in attitudes observed with Russian authorities, South Korea appears to be relaxing its stance on ICOs whilst tightening its grip on cryptocurrencies. 

Kim Yong-beom, the vice chairman of the country’s Financial Services Commission, was speaking at a public hearing at the National Assembly to discuss a bill seeking to regulate cryptocurrencies. Highlighting concerns that cryptocurrencies facilitate both money laundering and tax evasion, he stressed that the regulator would enforce “more stringent measures if necessary.

With regard to ICOs, the regulators intend to allow only professional investors to participate in ICOs, and maintain the ban for retail investors. 

Bitcoin is complicated in its technology and investment method. So considering its risk and technology expertise, it is right for professional investors to do an ICO, not regular citizens who are not informed of its technology and complicity,” said Kim Yong-beom.

International Trend

Korea is not the first country to backtrack on its initial position on ICOs. In recent weeks Israel, the Philippines and Malaysia have also vowed to regulate but not ban ICOs.

Authorities around the world are struggling to weigh up the potential innovation that ICOs can bring against the risks inherent in unregulated token sales. The matter is further complicated by a lack of understanding amongst regulators with regard to emerging technologies and financial models.