South Korean lawmaker lobbies for regulation-free ICO sandbox

August 31, 2018
Chris Wheal

South Korea risks being left behind by other countries unless it adopts a friendlier approach to initial coin offerings (ICOs), says one of its lawmakers. The government imposed a ban on ICO activity last September.

South Korea's National Assembly

South Korea’s National Assembly building in Seoul: Shutterstock

The issue resurfaced this week in the National Assembly, when the country’s Bareunmirae Party contributed to the debate. The party has adopted a bullish stance on blockchain technology and is pressing for clear and appropriate cryptocurrency regulation to be developed.

Party member Jung Byung-guk put forward a legislative proposal defining the process and legality of cryptocurrency transactions for the government’s consideration. He suggested that South Korea should follow Gibraltar’s approach to coin offerings by offering a regulation-free blockchain and cryptocurrency special zone or ‘sandbox’.

This approach allows for experimentation without exposing investors to most risks associated with this manner of raising funds.

South Korea missing out

Jung said that ICOs continue to grow in popularity around the globe, enabling companies to raise millions of dollars in friendlier jurisdictions. As South Korea is not part of this trend, the local economy is missing out on a significant amount of potential capital and this threatens to become an even greater concern over time.

He added: “We are planning to invite officials from government agencies and task forces related to blockchain and virtual currencies to the National Assembly in October to hold a global conference and issue a minimum declaration for ICOs.

“We hope that the declaration serve as a guide for countries in writing an ICO guideline that fits with their own political and economic situations.

Describing the current situation, he said: “I am so upset to see the South Korean government sitting on its hands after prohibiting all types of ICOs. National Assembly members have also been holding numerous meetings and seminars to revise and enact related laws, but we haven’t found an answer yet.”

Jung admitted that having spoken with economic and financial regulators and experts in both Finland and the UK “which have more advanced digital financing, start-up and venture ecosystems than South Korea”, it was clear to him that they also didn’t have any clear answer.

Another advocate for change has been Jeju Island governor Won Hee-ryong, who has lobbied for the Korean government to classify the sparsely-populated island state as a “blockchain hub” that allows token issuing.

 

Post written by Chris Wheal
Chris Wheal is editor of OpenLedger's news and features service. An award-wining business journalists himself, he runs a team of freelance journalists from across the UK and north America.

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