Korean Companies Leaving Korea to Launch ICOs
Six months ago the Korean government banned ICOs and new cryptocurrencies in Korea. There was a huge uproar over this decision. However, this did not slow the desire for companies to start an ICO. Many Korean startups and companies have looked abroad to places like Japan, Singapore, and countries in Europe. For example, ICON which many are calling Korea’s Ethereum was issued in Switzerland. By setting up their companies abroad, Korean startups are able to avoid the legislation and regulations of the South Korean government. There is really nothing the Korean government can do about this. As more and more Korean startups are looking abroad, there has been a huge movement to reserve the decision to ban ICOs.
So far there are close to 20 South Korean companies that have done or started to do ICOs overseas. Some are Korean startups but big corporates have also raised millions with ICOs overseas. The trend will most likely continue in for 2018. Most would have thought the ban on ICOs would have limited token exchanges in Korea, however, it has not slowed down. Many Koreans think it is only a matter of time before ICOs are back in Korea. This is only a temporary ban until the Korean government figures out how to regulate ICOs.
ICON Started the Trend
However, setting up an ICO overseas is not easy. First companies will need to establish a branch there. Hire the right lawyers as well as employees. The amount of paperwork will also be huge. Also, they will need to travel back and forth from the overseas country. Not a huge deal if it is located in Hong Kong, Singapore, or Japan, but Europe could get expensive. But ICON proved that this method can be profitable. They set up their ICON foundation in Switzerland and had their coin listed in Korea’s top 2 crypto exchanges Bithumb and Upbit. ICON traded at close to 10 cents and is now trading at over $2.50.
In the end, the banning of ICOs in Korea has really hurt the economy and have stalled the Korean startup ecosystem as investors are looking overseas for investments. In order to establish a strong and flourishing digital currency ecosystem, Korea needs to bring ICOs back to Korea sooner rather than later.