Will South Korea Reverse its ICO Ban?

Bitcoin in South Korea is a very hot topic but what is not being talked about enough is the demand for the ICO ban to be lifted in South Korea.  It seems the South Korean government like to follow the lead of China.  While South Korea has not fully banned Bitcoin, they are considering it.  All these regulations and bans on such a new industry like cryptocurrency can’t be a good thing for South Korea.  Let’s examine why the South Korean government is so afraid of ICOs and if there is a chance for the ICO ban to be reversed.

What is an ICO?

An ICO is an initial coin offering.  It is not like an IPO (initial public offering).  IPOs are regulated.  ICOs, on the other hand, are not regulated by the government.  An ICO is when a company attempts to raise funds, similar to crowdfunding, by distributing tokens to their investors.  It is seen as an innovative way of engaging with the community.  People can invest in a company’s funds for distributed shares.

Why is the South Korean Government Afraid of ICOs?

ICO banSouth Korea has a history of fraud and corruption.  There are undoubtedly scammers out there that will make false companies with false products and services.  This can result in people investing in a worthless company.  However, I feel it should be up to the investor to make the right decision.  It almost seems as if the South Korean government does not believe in their own citizens to make rational and informed decisions when it comes to investing.

Will South Korea Reverse its ICO Ban?

If South Korea reserves its ICO ban then ICOs will become heavily regulated.  The main goal of the South Korean government is to protect investors in the early stages.  I do feel the ban will not last for long.  The most likely outcome in South Korea is that the ICO ban is only temporary.  During this time the market will settle down and the South Korean government will work on regulations for consumer protections.  Once they step up these regulations, look for the South Korean government to take a step back and see how it works out.

We need to pay close attention to China.  If China decides to bring back ICOs then South Korea will watch closely to see how China does it then follow suit.  If you are tired of seeing South Korea follow China, you are not alone.  It goes to show that South Korea is not the powerhouse it thinks it is.  That can clearly be seen in how they are dealing with cryptocurrencies.  Korea will be holding their elections on June 13th.  Depending on who gets elected, a clearer picture of ICOs in Korea will be shown.

John Yoon

John Yoon is the Editor in Chief at Startup Radar, Organizer for Startup Festival 2017, Head of Operations Korea at EOS Asia and the Global Marketing Director for Foresting.io. Email = john@startupradar.asia if you are interested in guest contributing and helping the Korean startup ecosystem. Wechat, Kakao, and Line user ID is jswy315

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