South Korean Regulators Discuss Proposals for ICO Legislation
Korean lawmakers are increasingly pushing for the regulation of initial coin offerings (ICOs) with multiple bills currently pending at the National Assembly. This includes a proposed amendment to the Electronic Financial Transactions Act. Meanwhile, the Korean Blockchain Association has also come up with its own set of guidelines for crypto exchanges and ICOs.
Five Crypto-Related Bills
It has been about a year since initial coin offerings (ICOs) were banned in South Korea, but the government has yet to introduce a set of guidelines for them.
There are more than five crypto-related bills pending in the National Assembly, Chosun wrote on Friday. In addition, lawmaker Park Yong-jin of the Democratic Party has proposed an amendment to the Electronic Financial Transactions Act, which would regulate cryptocurrencies and initial coin offerings, the publication added.
Representative Ha Tae-kyung said last week that ten lawmakers who worked on this bill are pushing for the government to lift the ban on ICOs. The bill proposes definitions of crypto-related businesses such as trading, brokerage, and management.
Furthermore, ICO issuers must ensure that their tokens adhere to certain standards and obtain approval from the Financial Services Commission (FSC) before launching ICOs, Asia Economy TV explained. Chosun added that with the FSC being part of the process, it will “strengthen the stability and credibility” of the crypto industry.
At a National Assembly meeting on Tuesday, the FSC was questioned about its ICO policy.
“Min Byung-doo, a Democratic Party member asked [the FSC about] the possibility of a change in the government’s policy on the ICO ban,” the Korea Economic Daily reported. He explained that a number of other countries such as the U.S., Switzerland, and Singapore have embraced ICOs.
Responding to Min’s question, FSC Chairman Choi Jong-ku emphasized that “The current policy of banning ICOs has not changed,” adding:
We are investigating the side effects of initial coin offerings (ICOs) from cases in overseas countries.
After token sales were banned in September last year, local companies have been fulfilling their needs abroad in countries which allow ICOs, such as Singapore and Switzerland.
The Korean Blockchain Association unveiled its self-regulatory guidelines for crypto exchanges and ICOs at a blockchain event in Seoul on Tuesday, Asia Economy Daily reported. The association has been trying to enforce self-regulation on its members that are crypto exchanges.
The association’s chairman, Chin Dae-je, detailed that an ICO will be permitted after the group has examined the feasibility of the project by reviewing its whitepaper, the publication conveyed. The whitepaper must include information such as project name, services, investors, technology sources, schedules, and investment risks. In addition, the token issuer must collect “only transparent funds” from identified investors.
Also in the guidelines is an exchange registration system, a capital requirement of more than 2 billion won (~$1.77 million), listing criteria, fee disclosure requirements, a complaint management system, and anti-money laundering (AML) requirements.
Do you think South Korea will regulate ICOs soon? Let us know in the comments section below.
Images courtesy of Shutterstock and the FSC.
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