South Korean Financial Regulator Reaffirms Negative Stance on ICOs and Crypto

The chairman of Korea’s Financial Services Commission Choi Jong-koo has reaffirmed his negative position on digital currencies and Initial Coin Offerings (ICOs), Business Korea reported Oct. 11. Choi spoke at a parliamentary audit session of the commission held at the National Assembly.

South Korea prohibited ICOs in September last year, stating that such a type of fundraising is “almost a gamble.” This August, Korean lawmakers, including participants from government ministries, returned to the cryptocurrency issue, focusing on repealing the country's ICO ban. Lawmakers agreed on the need to develop a related policy before carrying a resolution on ICO reallowance.

At the recent session, Choi reportedly said that “the government does not deny the potential of the blockchain industry," while noting that it “should not equate the cryptocurrency trading business with the blockchain industry.” Choi said:

"Many people say the Korean government should allow ICOs, but ICOs bring uncertainty and the damage they can cause is too serious and obvious. For these reasons, many foreign countries ban ICOs or are conservative towards them.”

Choi also addressed criticism of commercial banks that refused service to crypto exchanges, stating that "exchanges should be able to persuade banks to issue bank accounts to them.”

Other officials have said that the South Korean government is “likely” to announce its official position on ICOs in November. The Chief of the Office for Government Policy Coordination Hong Nam-ki said that the government will announce its position once it finalizes its discussion and receives the results of a government survey.

Hong told Korean business publication the Investor that the government launched a survey of blockchain companies to gather their views on the current legal framework.

In September, South Korean cabinet ministers agreed to exclude all sale and brokerage of digital assets based on blockchain technology from venture business classification. The move was reportedly taken in order to “strengthen the cooperation of related institutions” and to protect citizens from the “illegal activities” related to the digital assets business.