One of the top South Korean news outlets, Chosun, has published a report stating that the government of South Korea will soon permit ICOs (short for initial coin offerings), nonetheless subjecting them to rigid regulatory measures. This is in line with the recent reports of South Korean investors taking an avid interest in cryptocurrency exchange.
The scoop published by Chosun explains that multiple governmental financial institutions in South Korea, such as the Financial Services Commission, the Ministry of Strategy and Finance, and the Financial Supervisory Commission, have created a joint task force specially appointed to devise a context of legal policies that allow investors, businesses, and other interested parties to operate on cryptocurrency exchange markets.
More particularly, the governmental body is tasked with looking into methods for bitcoin investor taxation, for more rigid KYC (short for Know-Your-Customer) and AML (short for Anti-Money Laundering) imposition measures, and for institutional ICO investor participation.
Chosun reports a discussion with a taskforce spokesperson, stating that the appointed team of specialists is exploring options for creating stricter protection measures for investors and consumers transacting cryptocurrencies.
The spokesperson explains that the task force is also creating measures to permit ICO investments for institutional bodies that meet requirements for initial investment capital as per the standards raised by the Financial Supervisory Commission. Nonetheless, Chosun reports that the spokesperson firmly stated there will not be a possibility for public investment in ICOs from South Korean citizens.
Vitalik Buterin, co-founder of popular cryptocurrency Ethereum, admits that the global market for ICO is essentially made up of fake campaigns and shallow projects. Nonetheless, ICOs are a brilliant way for crowdfunding, allowing startups and projects in the initial developmental stages to gain capital using P2P (short for peer-to-peer) technology from a financial ecosystem that is completely decentralized.
This means that making ICOs available only to institutional bodies and investors that have government approval through too many regulatory procedures and policies goes against the very principle behind ICOs, thus rendering them less viable crowdfunding options for startup projects and forcing them to return to the previous VC (short for venture capital, made famous in the tech world by Silicon Valley investment companies) system.
In the past, South Korea had no intention whatsoever of establishing a regulatory framework for the cryptocurrency exchange industry operating behind its borders for fear that the public will take that as proof of government approval and legitimization of the cryptocurrency market. However, in the aftermath of significant rises in investor interest in the industry in the last few weeks, the South Korean government has modified its views on the matter completely.
In a scoop interview with a governmental authority on the topic, Chosun gathered that South Korea will seek to improve its cryptocurrency market policies by emulating procedures and regulations from other successful cryptocurrency market advocates such as the United States or Japan in order to create a more fertile investment environment.
The official states that despite the notoriety and infamy of cryptocurrencies, the South Korean government will do whatever is necessary to create a fertile environment for the development and proliferation of the national market.