The battle to for global blockchain supremacy rages on in South Korea as the head of the Korean Blockchain Association makes further calls to legalize initial coin offerings (ICOs).
Chin Dae-je, chairman of the Korean Blockchain Association, made a strong case for the presently banned fundraising method whilst speaking at a National Assembly Library seminar in Yeouido, western Seoul.
Believing that ICOs are the key to creating new jobs, boosting the economy and producing innovative world-leading blockchain startups, the chairman said:
“The government should implement guidelines to nurture the domestic blockchain industry, which will help Korea emerge as a global industry leader… Startups who comply with guidelines should be allowed to launch ICOs.”
ICOs have been a point of contention in many nations as they struggle to classify and regulate cryptocurrency tokens. Furthermore, ICOs have a muddied history of scams and fraudulent activities that caused knee-jerk responses from many governments such as the United States and South Korea, who banned ICOs or made them incredibly difficult to launch.
While investor and consumer protections have been at the crux of the contentious debate, so has the stifling of domestic blockchain enterprise and innovation in South Korea. According to the report, disallowing domestic ICOs has resulted in startups setting up shop in jurisdictions that accommodate ICOs such as Hong Kong, Japan, and Thailand.
Despite this claim, South Korea is home to a robust blockchain market with major investors and traditional companies beginning to enter the space and drive innovation. In addition to this, city governments, as well as national government entities, are largely in favor of backing the technology through public sector pilot projects, funding, education, and implementation.
The Korean Blockchain Association is no underdog however in its mission to legitimize ICOs; in September the governor of the Financial Supervisory Service called for an international standard for ICO and cryptocurrency regulations.
Furthermore, the Committee Chairman of the National Policy Committee spoke at the Korean National Assembly, furthering the argument that the present stance is causing global competition to get ahead.
As reported by local media outlet Korea Joongang Daily, Chin said, “By regulating and allowing ICOs, we can nurture start-ups with high potential, create jobs and reduce youth unemployment […] We can designate public or private organizations like the Korean Blockchain Association to look over the ICO white papers and verify the purpose of their fundraising.”
During his proposal, Chin offered up his organization as well as suggested other public or private entities as potential regulatory bodies that would oversee the verification of ICO whitepapers.
Trouble in tandem
Also backing cryptocurrency exchanges, Chin proposed for the government to make it easier for exchanges to set up new user accounts for Korean fiat deposits and withdrawals. He believes that should an exchange adhere to an approved standard of security measures, it should be allowed to “issue new virtual accounts”.
Chin considers these issues to have a knock-on effect to one another, arguing that if domestic exchanges disappear, then local startups seeking to gain funding through ICOs will be up against significant financial challenges and would result in domestic cryptocurrencies being listed on to foreign exchanges.
Highlighting the present impacts he said, “Korean exchanges that were ranked as the fourth or sixth-largest in the world before are dropping to below 20th place now.”
Also speaking at the seminar was Democratic Party representative Min Byung-doo, who has been backing pro-blockchain legislation. He said, “We cannot completely close the door on ICOs… The government needs to promote the blockchain industry by cooperating with the National Assembly and blockchain associations to curb scams, speculation and money laundering.”
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