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It Started! South Korea Parliament Debates Ending the ICO Ban

It Started! South Korea Parliament Debates Ending the ICO Ban 101
Source: iStock/AaronChoi

The National Assembly, South Korea’s parliament, has begun debating whether the government should overturn a ban on initial coin offerings (ICOs). The motion was presented after three members of parliament put forward separate private members’ bills that, if passed, would legalize ICOs in the country.

The assembly took the decision to debate the matter after two select committees last month called on the government to put an end to its ban, which was put in place almost exactly a year ago.

The chief financial regulator, the Financial Supervisory Service, has previously rejected National Assembly committee calls for ICO legislative reform, but may be forced to change tack should enough MPs lend their support to the measure during the full-house debate.

Critics have claimed the ICO ban is forcing South Korean companies to set up shop in territories with more lenient ICO legislation, such as Malta and Singapore.

The government may also be forced to act after Won Hee-ryong, the regional governor of special administrative province Jeju Island announced he would pursue legal means to allow ICOs on Jeju.

Earlier this week, Won reinstated his desire to force Seoul to reconsider the ban, telling reporters, “[I am] going to persuade the central government to lift its [ICO] ban, so South Korea can become a leader in blockchain technology. This is a sector in which Korean companies can really thrive.”

Another regional governor, Lee Chul-woo of North Gyeongsang province, has also stated his keenness to build a Zug-style, ICO-friendly “Crypto Valley.”

Leading academics have also voiced their support of ending the ICO ban, with professors Ha Tae-hyung of Suwon University and Yoon Soon-deok of Hansei University calling for the government to legalize ICOs. Per Business Post, the professors told a parliamentary select committee that they believed ICOs should be issued in special, regulated zones within the country, or to follow the American lead on ICO issuance in order to let the blockchain industry “evolve.”

Meanwhile, in an editorial for the Electronic Times, journalist Jang Ji-young called on the South Korean government to follow Israel’s lead in blockchain policy-related matters. Jang said that the ICO ban has forced South Korean blockchain startups to relocate abroad, and accused the government’s policy of allowing over USD 27 billion to “leak” to overseas exchanges as a result of its blockchain-and cryptocurrency-related regulations.

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