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ICO Ban To Be Lifted In S. Korea

31-Aug-2022 By: Sudeep Saxena
ICO Ban To Be Lifted

In an effort to balance stimulating innovation and providing sufficient consumer protection measures, South Korea is aggressively examining its regulatory actions in the cryptocurrency market. Initial Coin Offerings from companies in the sector were prohibited in the nation. However, it looks that restriction will shortly be waived.

The Bank of Korea will soon allow companies that deal in cryptocurrencies to publish new assets.

On Monday, the development was reported by a nearby news source. According to reports, the Bank of Korea (BOK), the central bank of South Korea, recently stated that the country's crypto economy requires the issuance of new digital assets through ICOs. To safeguard customers from the ICO-related scams, the nation outlawed them.

The BOK also emphasised the value of thorough industry oversight, particularly when it comes to stablecoins. This is respectable in light of the recent depegging trend that has affected many stablecoins, starting with Terra's UST.

The BOK also pointed out that despite South Korea's prohibition on initial coin offerings, recently released digital tokens continue to enter the nation. To do this, crypto companies issue these digital assets outside of South Korea and list them on local markets like Bithumb.

South Korea is active in efforts to regulate cryptocurrencies.

The South Korean Digital Assets Framework Act, which was just passed, would bring this latest plan into force. The planned regulation change will also make the South Korean industry's legal framework more clear. Millions of cryptocurrency investors reside in the East Asian nation, which emphasises the need for regulatory certainty.

South Korea is also attempting to impose adequate consumer protection measures in the sector. This is necessary because of the recent collapse of Terra and the rising number of frauds and scams. Recently, South Korea stated that 75% of illicit foreign exchange transactions in the nation in 2022 will involve cryptocurrencies. The BOK added that in enforcing these measures, they would take care not to stifle innovation.

Due to unfavourable tax legislation, South Korean cryptocurrency investors have not exactly been having a field day. The South Korean government wants to charge crypto airdrops in addition to existing forms of cryptocurrency taxation. The tariffs might reduce the aidrop value by anywhere between 10% and 50%.

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