According to local news sources, The financial institutions in South Korea are reportedly in the process of allowing ICOs for domestic investors with the purpose of advancing blockchain based technologies.
This step comes after a ban on ICOs by the South Korean government last year. But the South Korean government has been lenient on its implementation. This has allowed local investors to continue their participation in ICOs. The government has not asked local companies to refund the money raised during their ICOs before the ban neither has it prevented exchanges from initating operations in the country.
An anonymous source revealed that conversations were held with the National Tax Service, the Ministry of Justice, and other government agencies to work together to bring out a regulatory framework for ICOs. He also mentioned that speculations are rife in government circles about the possibility of imposing the capital gains tax and value added taxes on trades as well as corporate taxes on cryptocurrency exchanges.
He also mentioned that the regulation of ICOs should involve a bevy of stakeholders that includes local banks, ministries as well as tax agencies. This creates a level of transparency that enables the government to track capital inflow through these ICOs.
Kang Young-soo, who leads the Financial Services Commission’s (FSC) virtual currency response team, said that his agency is still weighing the possibility of allowing South Korean investors to participate in ICOs. They are also considering to permit companies for ICO launches.“The FSC has acknowledged a third-party view regarding [a reversal of the ban], but there’s nothing that we can say officially at the moment,” he said, noting that while the government is working to regulate the cryptocurrency market, it does not plan to regulate the digital assets themselves.
It will be interesting to see whether the speculations turn out into reality within a certain timeline. South Korea dominates the global cryptocurrency trade volume along with countries like Japan, USA etc. Favourable regulations for ICOs will turn out to be a boost in the arm for blockchain startups there who have been relying on ICOs to raise funds without the hassle of dealing with banks/VCs.
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