South Korea to Overturn ICO Ban and Legalize Crypto Fundraising
- South Korea has announced the legalization of initial coin offerings (ICOs).
- The new law reverses the 2017 ICO ban.
- The law for ICO will classify digital assets into securities and non-securities.
South Korea is lifting its 2017 initial coin offering (ICO) ban as President-elect Yoon Suk-yeol says it is legalizing cryptocurrency fundraising. In detail, Yoon Suk-yeol’s administration rolled out 110 nationwide tasks, in which ICO was brought back into existence.
Specifically, the government will create a two-track regulatory framework for ICOs that will categorize digital assets into securities and non-securities. The Presidential Transitional Committee said the bill for the legalization of ICOs focuses on the issue and listing of digital tokens and the prevention of unfair trading.
To add, Yoon’s administration has drawn up plans to implement ICO legislation under the Basic Digital Assets Law. This law will include guidelines on the issuance of digital assets such as NFTs, the protection of investors and the stabilization of digital transactions. In addition, the committee will also consider a discussion on crypto-asset tax.
More interestingly, the new government’s new plan is in line with Yoon’s election campaign promises. It was thanks to his promises on cryptographic developments in South Korea that he won votes in the presidential election.
During an audit in the past, in 2017, the Financial Services Commission (FSC) of South Korea banned fundraising via ICO for cryptos. The legal body had also banned fundraising through all forms of virtual currencies. The main intention of the regulator with the ban was to control and monitor virtual currencies. Moreover, earlier the government pointed out that ICOs will lead to scams and financial threats.
Additionally, in March 2021, South Korea implemented the Amendment Law on Reporting and Use of Specific Financial Transaction Information. This law clarified the AML/CTF rules for virtual asset service providers.