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In 2017, South Korea placed a ban on Initial Coin Offerings. This means of raising money, better known as an ICO, is similar to an Initial Public Offering, or IPO. Essentially, an ICO is when new projects sell crypto tokens in exchange for bitcoin or ether.
Though many companies use ICO without issue, the potential for scams led to both China and South Korea making the process illicit. However, the latter is looking to go back on this policy.
A Business Korea report Tuesday detailed that the nation's National Assembly officially stated that the startup method should be legal. Despite this, they did admit a desire for some regulations on the process to protect investors. Without regulation, they claim investors are at risk of giving money to false ICOs that claim to represent major companies.
The shift shows South Korea's reaction to an ineffective law, as the NA admits many did not adhere to it. Instead, they went to Switzerland or Singapore, paying extra money to go where ICO is legal. By making ICO legal, the NA may bring some of this business back to the country.
The proposal, as of right now, has the backing of the 300 member NA. However, the full legislative process has yet to occur, so it is not yet an official act of the nation.
Once made a law, the proposal will spur on talk between South Korea's government and the private sector. These talks will help the nation to agree on the level of regulation that should exist for ICOs.
Essentially, the law would return ICO to its prior legal state. Following this, the talks would then seek to impose some form of regulations once more. This will likely include a legal basis for crypto trading, as opposed to the agora that now exists in the crypto market.
For now, the market and the people of South Korea can only wait to see if the NA will push forth new legislation on ICO projects.