By
Chimamanda U. Martha
April 5th, 2024
A group of politicians have proposed a new bill that aims to legalize the launch of new digital currencies and Initial Coin Offerings in South Korea.
Rep. Hong Eui-rak of the ruling Democratic Party of Korea, together with ten other lawmakers, are pushing for legislative changes that will re-legalize ICOs in the country.
Speaking at a forum on ICOs and blockchain technology at the National Assembly in Seoul on Wednesday, Eui-rak proposed a new bill that would remove current regulatory uncertainty in the blockchain sector. If made into law, it will allow startups to raise finances with token sales at home rather than moving abroad.
As The Korea Times reports, the new legislation was prepared according to a research conducted by Eui-rak’s own office and the Korea International Trade Association, the largest non-profit trade organization in the country. The final draft of the bill will be ready for submission before the end of the year, although the group didn’t provide further details.
“The bill is aimed at legalizing ICOs under the government’s supervision,” said Eui-rak. “The primary goal (of the legislation) is helping remove uncertainties facing blockchain-related businesses. Under the bill, ICOs would be under tight supervision by the Financial Services Commission (FSC) and the Ministry of Science and ICT.”
The group doesn’t aim to legalize all ICOs, but only ones launched by research centres and public organizations focused on developing and promoting the blockchain technology. Thus, the report doesn’t mention funding project run by private startups.
Furthermore, all ICOs will be under tight supervision by the Financial Services Commission (FSC) and the Ministry of Science and Information and Communications Technology (ICT). The bill only applies to new projects and old ICOs will not be allowed back.
Speaker Chung Sye-kyun has underlined the need to remove political barriers impeding the development of blockchain technology and cryptocurrencies during his speech at the forum.
“Blockchain and cryptos can be used in various public sectors for good causes,” he said. “Given their potential, we need to work to help reduce political uncertainties they face.”
The bill, if passed, will lift the government’s ban imposed on domestic ICOs last year to prevent speculative investment in virtual currencies.
In September 2017, South Korean regulators took decision to prohibit raising money through ICOs for all forms of digital currencies. The move, the Financial Services Commission said at the time, would help to strengthen control over cryptocurrencies and prevent the use of raised funds for illegal activities.
However, it seems that the government’s position is changing given recent reports that Korea’s financial authorities have been discussing a plan to enable ICOs together with the country’s tax agency, justice administration, and other government offices.