Category Archives: Blockchain Law Society

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South Korean National Policy Pushes to Legalize ICOs

The Committee Chairman of South Korea’s National Policy Committee has spoken before the National Assembly and called for the legalization of initial coin offerings (ICOs).

ICO contention

Min Byung-Doo, also a member of the ruling Democratic party, spoke at a session of the National Assembly on 2 October, where the national administration is subject to questioning from lawmakers.

According to a local media outlet, Byung-Doo was adamant that “Korea should also allow ICOs”, adding that appropriate regulations would work especially should the crypto industry self-regulate and introduce safety standards that can protect against fraud and money laundering.

However, the government is still reluctant to alleviate its tough stance on the funding method. Chief of the Financial Innovation Commission (FIC) for the Financial Service Commission (FSC), Son Hyun-do, said that ICOs were difficult to permit due to “social-pathological phenomena and the possibility of price manipulation”.

Others such as policy adviser to the Justice Department, Lee Jong Keun, said last month at a parliamentary debate, “We must keep strict institutional regulations consistent with the dangers of cryptography.”

Competitor

Nevertheless, there are other members of the FSC who have taken a similar stance to Byung-Doo and urged the government to get legislation and regulation bills passed quickly.

Byung-Doo made the case that the ICO ban was dampening South Korea’s ability to compete on the global blockchain stage effectively.

With regards to the nation’s presently booming blockchain industry, he said: “Blockchain-related industries were at the top of the world in terms of competitiveness, but the competitiveness in ICOs has dropped sharply. Now, 75% of projects in the industry belong to the United States only, which is the world’s top competitor.”

Byung-Doo also referenced two of the largest ICO funding rounds in recent memory, presenting them as economically beneficial, saying, “We can see that the flow of investment is clearly changing compared to ICO and angel fundraising. The ICO [method] has raised USD 1.7 billion for Telegram and USD 4 billion for Block.One, it is getting bigger and bigger.”

As ICOs continue to be a global trend, the lawmaker does not wish to see South Korea fall behind, which could happen should prohibition of token sales continue.

A matter of time?

South Korea’s National Assembly has been host to several discussions surrounding blockchain, cryptocurrencies, and ICOs. The growing sense of urgency is likely derived from its consistent push to adopt blockchain technologies.

In recent months, South Korea has seen the establishment of the Blockchain Law Society, an entity that aims to advance legal and regulatory proceedings with the intention of also studying the technology and “promote interdisciplinary collaborations between diverse areas”.

Other facets that support the technology at all levels in the nation have been emerging this year. This included tax breaks for blockchain startups, education efforts, gigantic governmental funding for innovative technologies and enterprises and significant backing from the Ministry of Science and ICT.

Most recently, it became clear that blockchain was to grow in South Korea with institutional investors and domestic companies entering the industry. With big money in play and many other plates spinning such as the Jeju Island proposal, Byung-Doo’s stance is generously backed by positive evidence.

 

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Blockchain Law Society to Launch in South Korea

A new legal study group calling itself Blockchain Law Society is preparing to launch this week in South Korea.

A new cog in the machine

Local media outlet Yonhap News has reported that a number of South Korean blockchain experts have established what will be called the Blockchain Law Society. This new entity is built with the aims of advancing legal proceedings and study surrounding the technology.

The organization said in a press release, “Blockchain Law Society was founded not only to study blockchain technology from a legal aspect but to promote interdisciplinary collaborations between diverse areas, such as economics, computer engineering (and) field business.”

The society also stated that it will be inviting a number of experts such as judges, prosecutors, lawyers, professors and other prominent industry members.

Legislative progress

2018 is proving to be an expeditious year for blockchain technology in South Korea. News surrounding the adoption of the technology, classification of cryptocurrencies, evolving stances on Initial Coin Offerings (ICOs), as well as industry regulations and laws have consistently been flowing from the blockchain-adoring nation.

One of the most significant challenges that the nation is tackling is the law facet of the industry. It was in mid-July that the South Korean parties were submitting draft bills over a two-week period. This was in a bid to at least generate institutional and governmental discussion and at best, to actually implement legislation which will finally establish a legal consensus.

However, it was reported that political parties remained “widely divided” regarding their stances on blockchain technology and cryptocurrencies.

Not fast enough

The lack of clarification prompted Hong Seong-ki, head of the virtual currency response team for the nation’s Financial Services Commission (FSC), to publicly urge lawmakers in South Korea to pass the first cryptocurrency bills.

Speaking with Bloomberg, he highlighted that there are not enough consumer protections in place for the rapidly growing markets. He also went on to describe security and anti-money laundering as being the most urgent matters on the table.

It is a widely-held view that investor protection and fraudulent activities will stifle blockchain innovations, industry growth and mass adoption. In August, the South Korea Blockchain Enterprise Promotion Association (BEPA) applied more pressure on the government, making demands for regulators and lawmakers to again, “speed up” their efforts.

BEPA president Yoo Joon-sand argued that other countries around the world have already begun utilizing blockchain technology across multiple facets of their societies and that South Korean officials are focused on addressing “negative short-term side effects”, which he believes is a serious cause for concern.

On 24 August, the Blockchain Law Society will hold its official launch ceremony. Once formally established, the society could be the progressive tour de force that South Korean blockchain advocates are clamoring for.

 

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