South Korean financial regulators are reportedly reconsidering the country’s September 2017 decision to ban initial coin offerings (ICOs).
The Korean Times reports that South Korea’s Financial Service Commission (FSC) “has not yet decided” whether or not to allow ICOs to raise money within the Asian nation. Kang Young-Soo, who oversees cryptocurrency trading policies at the FSC, declined to officially confirm or deny allegations that the regulator was considering lifting the ban.
A report by CCN claims that the South Korean ICO ban has been largely ineffective, with blockchain startups based in South Korea able to successfully work around the ban. Several South Korean ICO projects have registered in foreign countries, such as Switzerland, and conducted their coin offerings abroad, even attracting capital from South Korean investors, and then successfully listed their coins on South Korean exchanges.
With companies successfully bypassing the ban by raising money abroad, and investor interest growing, reversing the ICO ban and allowing startups to conduct funding rounds in South Korea may bring more capital into the country and reduce enforcement costs.
However, the Korean Times cites an anonymous source with knowledge of the country’s tax code as saying that the country must first fix the “legal groundwork” for cryptocurrency trading as well as implement a way to “track the history of capital inflow into ICOs.”
In the meantime, South Korea has “no plans to regulate cryptocurrencies and blockchain technologies” according to Kang Young-Soo, so ICO projects may be forced to continue to sidestep the official ban while waiting for authorities to figure out the legal situation.