South Korea is again the focus of attention, after China, after reading in Forbes magazine, that Korean companies and startups are making the necessary defensive efforts to counter the announced restrictions on investment in ICOs:
Recall that the Financial Services Commission of the country announced on September 29 the “ban on all forms of ICO”, including the issuance of securities, prohibition of currency margins, financial loans, and credit concessions. The FSC noted fears that unproductive cryptography was negatively impacting financial markets, making additional measures “inevitable.”
Regulators have not yet banned ICOs, set up a working group to prepare for the ban, but set no dates for its implementation.
Local leaders in the cryptographic industry argue that the ban is legally unfounded. ICOs cannot be penalized under existing laws.
They fear that over-regulation will push local talent and currency into the most welcoming jurisdictions like Switzerland, Singapore, and Japan.
Kim Tae-won, director and former chair of the Korea Block Industry Promotion Association and Glosfer’s chief technology officer, says the ban was rushed, perhaps due to internal deadlines and pressure from high charges, with regulators approaching cryptocurrencies as if they were all pyramid schemes.
“We’re not even afraid of what comes from the government,” Kim said. “I can guarantee that the final regulation will not look like what the government proposes.”
Regulators viewed ICO as an “imminent threat” for individual investors, according to Lee Seung-gun, president of the Korea Industry Association Fintech and executive director of Viva Republica’s startup.
“The FSC shared its view on the ICOs before and it was quite clear […] that they would ban all ICO financial transactions,” he said.
A conservative legal culture of many years may have influenced Korea, which is accustomed to “negative policies” – not to do until it is permitted – against “positive policies” – to go ahead until it is said otherwise, said John Ra, CEO of Bitcoin Center Korea. “But in such a new industry with technology that moves so fast, a system of negative policies is far behind,” he said. “If you start doing that as a government, you’re going to lose out to other countries that have a positive system.”
In the end, regulators are more concerned with preventing negative impacts on the financial market than with the ICO ban, says Lee of the Fintech Industry Association of Korea, fintech’s frontline agency to consult with the government. He hopes that the final regulation will control what the fiat legal currency can do, rather than what the crypto coins can do.
Lee said that if companies can show the FSC a way to promote ICO technology innovation and avoid its negative aspects, “there is still an opportunity to make the situation more market-friendly.”
From the original article by Elaine Ramirez, Forbes magazine.
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