South Korea’s National Assembly Pushes Government To Allow ICOs

News, Regulation | May 29, 2018 By:

The National Assembly of South Korea has officially made a proposal to allow domestic initial coin offerings (ICO), but with stricter investor protection controls.

In September 2017, the Financial Services Commission (FSC), South Korea’s financial regulator, prohibited domestic companies and startups from participating in ICOs. As a result, blockchain companies moved their operations into countries with welcoming policies and few restrictions, such as Switzerland, Hong Kong, and Singapore.

In a recent meeting held on May 28, the National Assembly’s special committee accused the government of neglecting its duty towards encouraging blockchain innovation in the country. The committee has proposed allowing ICOs under the conditions of investor protection. It also called on the government to form a task force to “improve transparency of cryptocurrency trading and establish a healthy trade order.”

“We need to form a task force including private experts in order to improve transparency of cryptocurrency trading and establish a healthy trade order,” the 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 legislative effort came after Yoon Suk-heun, the newly appointed governor of South Korea’s Financial Supervisory Service (FSS), announced that the country’s top financial regulator will look to ease regulations on domestic cryptocurrency trading. He said better regulation “would produce” a more stable financial system where related services and products would be more likely to make them serviceable, and that would further improve the system.