South Korea was one of the first major names to adapt cryptocurrency payments. While they aren’t a legal tender in the nation, many online portals, as well as physical stores in the nation allow cryptocurrency payments. A sizable portion of the population is investing into cryptocurrencies - and as a nation, South Korea has been pretty open to this innovative new economic system. While the government wasn’t really hostile towards cryptocurrencies, ICOs were on their radar. Owing to a rise in ICO scams, ICOs were banned in South Korea.
However, if recent reports from the country are to be believed, it appears that South Korea may be working on a plan to reverse this ban on Initial Coin Offerings in the country. However, there will be some strict regulations in place. Reports from The Korea Times, one of the biggest business publications in the country claim that South Korean government may soon allow ICOs and token sales under certain conditions.
As per the publication, a South Korean government official has told them that “The financial authorities have been talking to the country’s tax agency, justice ministry and other relevant government offices about a plan to allow ICOs in Korea when certain conditions are met.”
After ICOs were banned last year, South Korea’s Financial Service Commission (FSC) vice chairman Kim Yong-beom commented that ICOs were causing money to be “flooded into an unproductive and speculative direction.” However, despite their ban on domestic ICOs, South Korean citizens could continue to invest in foreign ICOs. South Korean companies such as Kakao, which intend to raise funds with their own ICO are considering options such as Hong Kong and Singapore to set up their operations.
The government of South Korea banned ICOs in September 2017. This led to a widespread panic and FUD in the markets which slowed down the growth of a number of cryptocurrencies. This decision was announced just a few months after China announced a ban on cryptocurrency exchanges in the nation - leading to a fear that South Korea may soon do the same too. However, that did not happen.
South Korean government officials have been quite strict on cryptocurrencies in the recent past, primarily due to two issues - the anonymous nature of cryptocurrencies and the potential threat of tax evasion that cryptocurrencies pose. The government is taking measures to ensure that anonymous accounts cannot be used for trading and that all cryptocurrency exchanges in the nation need to have their customers comply with a KYC procedure.
The government is also banning foreigners from using domestic South Korean exchanges. These exchanges have attracted many users from beyond the nation because of the price difference that exists between the South Korean cryptocurrency exchange rates and rates elsewhere. The government has forced all public officials in the nation to disclose their cryptocurrency holdings - and has also declared a ruling that public officials can no longer be involved with crypto-trades.