South Korea Softening on ICOs: Update

South Korea Softening on ICOs: Update

 

After the recent drops in ICO funding there’s finally some good news for ICOs: world bitcoin hotspot South Korea is walking back from its ICO ban. In September government officials announced an outright ban on all ICO activity but are now looking instead to regulate activity and allow, “institutional investors who meet certain capital requirements to invest in ICOs,” a government spokesman said.

The South Korean government had previously been reluctant to legislate in the crypto space lest it be taken as implicit approval. Recently they have begun to change their stance and are preparing to follow the lead of Japan and the US, claiming they have “no other choice but to follow the regulatory frameworks and trends established by other leading governments.

Individual Investors Remain Locked Out

A multi-government agency taskforce has been created under the leadership of the Department of Justice with the objective of creating new regulations surrounding ICOs and cryptocurrencies. Their major goals will be ensuring that customers are properly vetted, that money laundering is avoided and that institutional investors are provided for.  

However the door remains shut to individual investors. A spokesperson for the task-force made clear that though traditional financial players may be allowed in the ICO space, “it is not possible to allow any citizen of South Korea to invest in ICOs.

South Koreans have proved to be among the world’s most enthusiastic Bitcoin investors but their government has a more ambivalent view. Regulators are planning more stringent Know Your Customer (KYC) legislation for all cryptocurrency exchanges and recently stymied plans to launch a bitcoin futures market in South Korea.

However, with futures contracts starting to trade this weekend in the US and early next year in Japan, the government may have little choice but to allow them in South Korea too. In an industry which moves this fast, any prediction over what will or will not be available next year seems impossible.