Category Archives: ICO Law

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South Korea Triples Blockchain Budget to $35 Million

The South Korean government will be tripling investments into the development of blockchain technology as well as industries that include distributed ledger technology (DLT).

“In agreement”

Korea Economic Daily has reported that a recent meeting held between a number of government entities has resulted in the rollout of an increased blockchain budget worth KRW 40 million (USD 35 million), which is triple that of 2018’s.

With DLT and blockchain technology at the center of the discussion, the Ministry of Science and ICT, Ministry of Information and Communication, the Democratic Party of Korea, as well as others were present to hear the announcement made by Vice Minister of Health and Welfare.

The Second Vice Minister of the Ministry of Science and ICT said that “everyone agrees that the blockchain is a technology to change the future… This is why we organized the budget for 40 billion won, and this year we will increase the number of projects to sixteen public areas including real estate transactions and personal clearance to 12 next year.”

Accordingly, the Ministry of Information and Communication will be providing technical, verification and consulting services for blockchain startups in 2019.

Infrastructure plus resources

Blockchain-related enterprises are garnering a great deal of attention in South Korea, recently its largest domestic venture capitalist (VC) firm stepped into space and invested in a supply chain solution powered by the EOS network. This is not a unique case; South Korean enterprises are clamoring to partner up with blockchain companies, bolstering positive industry perceptions of technology.

Outside of private entities, public sector blockchain projects are set to be doubled in 2019, backed by further pledges to support the industry from the Ministry of Science and ICT. Furthermore, the blockchain workforce is being propelled by educational courses and other funding initiatives to develop the next generation of experts in anticipation of a blockchain future.

Debate

However during the meeting, University of Kyunghee Professor, Han Ho-hyun was not entirely impressed with the budget that had been announced. He conceded that it was “difficult to secure KRW 40 billion by tripling next year”, and in comparison to other nations who are investing “tens of trillions”, the professor bullishly claimed that “we can invest more than KRW 100 trillion in three years.”

This was contested by the head of blockchain and convergence at the Informational and Communication Technology Promotion Center (IITP), who said, “If I invest USD 1 trillion in building a blockchain budget in IITP, you need to see if you need additional inputs.”

Initial coin offerings

South Korea is preparing its next phase of blockchain development as the ICO legal status decision nears its due date. In October, it was formally announced that the contentious issue of ICOs would be settled once and for all, which could prove to be a defining moment for domestic and global blockchain industries.

 

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South Korea Sets November Date for ICO Legal Status

The legal status of initial coin offerings (ICOs) in South Korea will be decided on in November, according to a government official.

Decisive

According to a local media outlet, Hong Nam-ki, chief of the Office for Government Coordination, provided insight with regards to the government’s position on ICOs. In September, the Financial Supervisory Service (FSS) began surveying domestic blockchain companies to gather their expertise and opinions on the present framework.

Speaking at the annual South Korean National Assembly audit, Hoong said that officials in the pro-blockchain nation have held several discussions on ICOs adding, “Once the survey results are in by end-October, we plan to finalize the government’s stance.”

Revealing of domestic blockchain ambitions for the decision, Hong said, “We did the survey as some companies are conducting or preparing for ICOs despite the ban here.”

Urgency

In September, the FSS reserved a bullish position on ICOs when FSS Governor Yoon Suk-heun spoke with international regulators in Seoul. At this meeting, he suggested an “international discipline system” for virtual currencies and ICOs.

During questioning, member of the ruling Democratic Party Jeon Haecheol backed the lifting of the ban saying, “If we waste time, the blockchain industry could face huge difficulties. We need to look at very realistic and specific ways to nurture the blockchain industry, and I think permitting ICOs is one of them.”

This argument echoes previous statements made by other Democratic party members. Last week, Min Byung-Doo spoke before the National Assembly and made a firm case for ICOs in South Korea, believing the ban would only damage the nation’s fast-emerging and innovative blockchain industry, impacting its position as a global player.

Most recently, the chairman of the Korean Blockchain Association also presented ICOs as a way to boost the economy and create new jobs, urging for the government to nurture the domestic blockchain industry, not stifle it with overcautious regulation.

Contention

However, the divisive issue of ICOs remains just that in South Korea, despite the nation demonstrating blockchain excellence time and time again. The chief of the Financial Services Commission (FSC), Chairman Choi Jong-ku, recently revealed a firm anti-ICO stance.

Speaking at the annual parliamentary meeting, local media outlet Yonhap News quoted Choi saying: “Although many people call for the government to allow initial coin offerings, there are still uncertainties related to such a move as well as the possibility of serious fallouts.”

That said, it is important to note that the chairman isn’t necessarily anti-blockchain. As reported, he believes it’s not necessary to equate virtual currencies and blockchain. It is a similar attitude to that of China who banned cryptocurrencies and ICOs altogether but has been adopting blockchain at accelerating rates.

Nevertheless, this doesn’t appear to have thwarted crypto-enthusiasm in the nation. With some startups launching cryptocurrencies regardless of the ban, South Korea could find itself in a similar position as China has should the ban remain in place.

 

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