Category Archives: ICO ban

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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.”


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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SEC Chairman Doesn’t Believe Every ICO is a Scam; Japan and South Korea Charge Ahead Toward Regulation

Jay Clayton, the Chairman of the US Securities and Exchange Commission (SEC), gave a speech at a Princeton University event that provided fascinating insight into his evolving views on how to approach initial coin offerings (ICOs) as well as how to classify and regulate cryptocurrencies.

Not every ICO is a scam

Essential discussions that delve deeper into blockchain technologies, ICOs and cryptocurrencies are taking place all over the world. Perhaps now that the markets are cooling off, the topic of how to legitimize the lucrative technology is finally on the table.

During the event, the SEC chairman disregarded that all ICOs were fraudulent scams, bearing contrast to his position in February. At a Senate hearing, Clayton declared he was “unhappy” with how ICOs were conducted, based on the fact that they did not follow private placement rules, and that there were some fraudulent ICO operators.

Clayton made a potent remark that brought to light a solution for a lesser-mentioned problem: what happens if the technology continues to have fraudulent actors? He said:

“I think if we don’t stop the fraudsters, there is a serious risk that the regulatory pendulum – the regulatory actions will be so severe that they will restrict the capacity of this new security.”

Overseas efforts

The United States isn’t the only country wrestling with the ICO debate; in Japan, a recent government-backed study revealed that it now is looking to bring forth the proper legal and regulatory frameworks to give the go-ahead on the popular capital-raising method.

The report included guidelines that will identify investors, which will prevent money laundering, which acts as a protection for existing shareholders and debt holders, making “unfair” trading practices such as insider trading a thing of the past for cryptocurrencies.

The report also goes on to classify three types of ICOs:

The “venture company type” is the typical fundraising method and is defined as “fund-raising by venture companies through high-risk, high return investments”.

The second is the slightly lesser known “ecosystem type” which is described as “fund-raising for collaborative efforts in which multiple corporations such as companies and local governments are engaged”.

The third and probably least known of them all is the “large company type”, which is for “fund-raising by companies for certain in-house projects with high risk”.

Advancements in the United States and Japan are steering the future of cryptocurrency in the right direction; BitcoinNews recently reported that South Korea is making preparations to tax cryptocurrencies, which may come off as alarming, but can be a vital spoke in the regulatory wheel.

Rallying support

What makes it even less alarming is that the third largest fiat-to-Bitcoin market in the world is also preparing to have a cryptocurrency for its capital city, and in fact, the United States and Japan are above South Korea in the fiat-to-Bitcoin market listing.

It is evident that despite the constant negative press, cryptocurrencies are part of very progressive discussions taking place in the largest markets in the world. It is these serious pioneering efforts that will make blockchain technologies and cryptocurrencies validated as part of the economy.


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Will Crypto Ad Bans by Tech Giants Protect Users?

Recent restrictions on cryptocurrency-related advertising by Twitter, Facebook and Google have generally been met with a positive opinion regarding exactly how this ban will affect users.

Questions are now being asked by cryptocurrency pundits as to the effectiveness of the ban, many proposing that this may open the field for more reputable blockchain companies to take advantage of the big three’s withdrawal. Twitter has cited the “safety” of its community as the reason that they are to impose their new advertising restrictions. Until recently, any ICO has been free to advertise across the internet, of which many have proved to be either fraudulent or, at best, unsound investments.

Another issue for search engines and social media has been the legal liability of these companies, not helped by SEC cryptocurrency regulation which has often lacked clarity regarding cryptocurrency advertising.

Although Blockchain companies generally support the ban, much speculation exists regarding the big players’ new advertising regulations. Tatiana Moroz, founder of Crypto Media Hub, thinks higher quality interactions will be one possible positive result. She feels that the absence of crypto marketing on search engines and social media will bring about more significant partnerships forged through community building and relationships.

There is much debate within the industry regarding where advertising should place ads and indeed exactly where customers expect to see them. Cointalk writer Jay Kang cites the ideal future for cryptocurrency as a world which creates “…an atmosphere where you can make a good faith investment in a project because you think that project and potential…and it is not going to be overrun by scammers”.

Forbes agrees with such views, claiming that top cryptocurrencies such as Bitcoin and Ethereum are now so well known that they don’t depend on advertising. Their view is that new restrictions don’t mean that cryptocurrency is going away, but to the contrary, will strengthen as a result of get-rich-quick schemes and scams being weeded out in a stronger, more reputable market.

The Google ban will become effective by June 2018.





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