Category Archives: ICO News

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South Korea’s National Assembly Proposes to Lift ICO Ban

South Korea’s National Assembly has made official proposals to allow for domestic initial coin offerings (ICOs) to be legalized, roughly eight months after the country banned all ICOs in September 2017.

South Korea has proven itself it be a fertile land for blockchain and cryptocurrency adoption; it is home to some of the largest exchanges in the world as well as the progressive visions for blockchain technologies to become a mainstay in South Korea’s capital city.

However, since the September 2017 ban, the country’s government has been sweeping the issue of ICOs under the carpet, but it is apparent that now that such significant advances have been made, it is about time the topic of ICOs comes to the forefront.

Ongoing developments

In early May, Bitcoin News reported that key governmental figures were banding together to draft a bill to lift the ban. A particular reason for the move was due to the fact that South Korean companies are raising their funds overseas in friendlier jurisdictions such as Switzerland and Singapore; it is not only costly for the companies themselves but also presents risks to investors who may fall victim to scam ICOs impersonating leading companies.

According to a report by Business Korea on 29 May , the special committee on the fourth industrial revolution went as far as to accuse the government of “neglecting its duty” in its slow response to the expansion of the blockchain industry.

The committee is also calling for a task force made up of both public officials and private experts to “improve transparency of cryptocurrency trading and establish a healthy trade order”.

Ban reversal

Business Korea also reports that the special committee on the fourth industrial revolution also said, “We need to form a task force including private experts in order to improve transparency of cryptocurrency trading and establish a healthy trade order”.

It continued, “The administration also needs to consider setting up a new committee and building governance systems at its level in a bid to systematically make blockchain policy and efficiently provide industrial support. We will also establish a legal basis for cryptocurrency trading, including permission of ICOs, through the National Assembly Standing Committee.”

The timely news arrives as proactive stances on regulation, and taxation frameworks in South Korea begin to set standards for the rest of the world. Additionally, the Business Korea report suggests that now discussions on blockchain and ICOs between the National Assembly and government will “accelerate”, which spells great news for domestic blockchain and cryptocurrency startups, not to mention the entire global industry.

 

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This Year’s ICO Funding Has Exceeded All of 2017

Initial coin offerings (ICOs) continue to rise in popularity; in the first three months of 2018, ICOs have managed to generate more money than they did for the entirety of 2017. According to the data collected by CoinDesk, that figure sits at USD 6.3 billion, 118% of the 2017 total.

It appears that despite the numerous minor and higher profile controversies that ICOs have been tied to, the digital funding method is rapidly gaining confidence across the board. In the winter of 2017, the markets were piping hot and yet, ICOs were cooling off.

Uncertainties caused by ICO bans were partly to blame for the dip in confidence, especially the prohibitions from South Korea and China which are two very prominent market forces. This news further fuelled the doubt of cryptocurrencies and the technology being stifled entirely, but as the numbers show, ICOs are thriving.

ICOs on the rise

The data reveals a month-on-month increase from December, which was at USD 1.44 billion. In January, that figure rose to USD 1.79 billion; in February it grew to USD 2.38 billion, a significant rise which preceded a minor dip in March which brought in USD 2.15 billion.

The leap in the numbers can be attributed to the increased size and rate of the average ICO; Q1 of 2018 has already launched 59% of the total ICOs that were launched the previous year. However, it is important to note that the figure is slightly skewed – Telegram had a gigantic ICO which raised USD 1.7 billion, but minus that figure and Q1 2018 ICOs stand at 85% of the 2017 total, which is still no small feat.

So far in 2018, 200 ICOs have taken place, (343 in total for 2017) and most of them are raising less than USD 100 million.

Growing a global ICO consensus

The US has also provided positive insights into future attitudes towards ICOs; the chairman of the Securities and Exchange Commission (SEC) Jay Clayton made comments suggesting that ICOs are securities, and can be classified and regulated as such, reducing risk and encouraging blockchain entrepreneurship.

It’s is widely understood that ICOs carry a high risk for investors, especially to those looking in from traditional investment positions. At the heart of the ICO issue is global regulatory uncertainty. Without a global consensus on how to legally operate and tax ICOs, the modern digital fundraising method will still have some hurdles to overcome.

As the year rolls on, conversations regarding ICO and cryptocurrency regulations have gone from skepticism to intriguingly progressive sentiment; France, the United Kingdom, Japan, South Korea and other countries are looking to make ICOs and their related technologies safe and fair for investors. They have the foresight to see that the technology will flourish should the “bad actors” within the industry be forced to work within legal, regulatory frameworks.

 

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South Korean Financial Watchdog to Investigate Banks Under New Crypto Rules

The South Korean Financial Services Commission (FSC) will inspect three of its banks to see if they are conforming to new anti-anonymity regulations.

In January, the financial watchdog announced that cryptocurrency investors in South Korea would have to use their real-name bank accounts in order to be able to deposit funds. The new regulation intended to remove multiple trading accounts on domestic cryptocurrency exchanges and to strengthen positive views of cryptocurrency trading by tackling money laundering.

Proactive efforts

In a statement, it announced: “We have already executed sufficient procedures for confirming the identity of a member when receiving a new member via a corporate account and it is against equity to allow only a few exchanges to issue new virtual accounts.”

FSC and the Financial Intelligence Unit will begin on-site inspections on three banks – NongHyup, KB Kookmin and KEB Hana Bank – from 19 to 25 April.

The inspection will focus on whether or not the three banks have managed to implement the new rules successfully. If so, it is hoped that this will contribute toward South Korea’s progressive approach to cryptocurrency and blockchain technologies.

Financial regulators and banks aren’t the only entities with blockchain developments in South Korea; they are part of an industry-wide paradigm shift that is experiencing frequent highs and lows. South Korean cryptocurrency exchanges are now to be taxed under existing policies, while Seoul is pushing to have its own cryptocurrency.

Furthermore, the Fuji News Network (FNN) also announced that the Korean government is setting up full-scale cryptocurrency regulations after local elections on 13 June, just ahead of a planned virtual currency international conference for G20 members on 14 June.

The scramble to regulate

More recently, the United Kingdom’s Financial Conduct Authority (FCA) also announced that it would be working with the Bank of England and the UK Treasury to begin discussions on how to regulate cryptocurrencies.

“People are becoming increasingly aware of cryptocurrencies, such as Bitcoin,” said Nicky Morgan, a Member of Parliament and chair of the Treasury Committee, “but they may not be aware that they are currently unregulated in the UK, and that there is no protection for individual investors.”

In China, similar efforts are also gaining momentum. In March, the Institute of International Finance, part of The Peoples Bank of China (PBOC), gave refreshing insights into the evolving attitudes in the country. In a contrasting report to China’s present stance on cryptocurrencies, exchanges and ICOs, it stated that cryptocurrencies could bear risks against the Chinese Yuan (CNY), but the Institute of International Finance is in favor of establishing a regulatory framework for cryptocurrency on a global scale.

South Korea is a huge proponent in the tide of major financial entities and governments pushing to recognize cryptocurrencies. Despite the current shaky market and past controversies, global approaches to the technology are undergoing profound political changes and 2018 is already proving to be an extraordinary year for positive blockchain advancements.

 

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