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S Korean Cryptocurrency Industry ‘Excited’ by Possible ICO Lifeline

S Korean Cryptocurrency Industry ‘Excited’ by Possible ICO Lifeline 101
Busan. Source: iStock/cozyta

South Korean cryptocurrency companies have been buoyed by a ministry’s decision to select the country’s second city as the preferred bidder for a blockchain free economic zone project – as it may open the door for initial coin offerings (ICOs) in the country.

However, industry officials say they are “optimistic” about the future of ICOs in the country after the Ministry of Small and Medium Venture Businesses named the port city of Busan as its preferred bidder for a national blockchain free economic zone. The zone would be subject to its own set of regulations, possibly meaning that companies operating within it could issue regulated ICOs – should Seoul give the proposal the green light.

Blockchain startup founder Kim Jin-ho told Cryptonews.com:

“The government still has to make its final decision on Busan’s plans, so it’s still up in the air. But there’s a quiet optimism among many I’ve spoken to that in some form or other, we might finally see Korean companies conducting ICOs again.”

Should the government accept all of Busan’s proposals for the project, South Korean companies could seek to launch their ICOs in the new zone – rather than relocating their business overseas to countries like Singapore.

Fn Today quoted an official from the city of Busan as saying, “If we can allow companies to raise funds through cryptocurrency-related business, as is the case in Singapore, there will be no reason for enterprises to go abroad.”

ICOs have been banned unequivocally since 2017, a decision which was upheld earlier this year.

And per Fn Today, the domestic blockchain industry is “keenly anticipating” the government’s verdict, which will be announced in July – but is happy to see that Busan’s proposal is now the official frontrunner. The same media outlet suggests that Busan could “become the new Singapore” if its new zone indeed allows domestic ICO launches. The ministry says it will “refer to overseas examples” – such as that of Singapore – when making its decision.

Seoul is keenly aware that dozens of South Korean business giants and startups have relocated their crypto-operations abroad, chiefly to Singapore, where their revenues are subject to Singaporean (rather than South Korean) taxation laws. These include the likes of Naver, the Kakao Group and NHN Entertainment.

Busan has a number of big-name business backers in its wider cryptocurrency and blockchain plans, including the likes of Hyundai. Hyundai Pay, the company’s e-payment arm, earlier this year sealed a blockchain business deal with the City of Busan, and relocated its headquarters to the city. They will co-develop a blockchain platform and a cryptocurrency wallet.

Hyundai is a keen backer of the city’s free economic zone plans, too, as is the city’s biggest bank, the Bank of Busan.

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