The head of South Korea’s Financial Services Commission (FSC) has reiterated his negative stance on initial coin offerings (ICOs) and crypto transactions just weeks before the government is expected to announce its official position on the crowdfunding mechanism.
Business Korea quotes FSC chairman Choi Jong-koo at a parliamentary audit session of his commission at the National Assembly on Oct 11 as saying that crypto trading should not be equated with the blockchain industry.
But he says the “government does not deny the potential of the blockchain industry”. His comments come just as the Financial Supervisory Service (FSS) is about to finish a survey among blockchain startups gathering their views on the current legal framework for ICOs.
The FSC directs the FSS and is the chief agency for financial policies in the country. The government is expected to then state its official position on ICOs taking into account the views of the startups.
“Many people say the Korean government should allow ICOs, but ICOs bring uncertainty and the damage they can cause is too serious and obvious,” Choi says. “For these reasons, many foreign countries ban ICOs or are conservative towards them”.
The business online portal says Choi’s remarks reaffirmed his negative stance that it is difficult for blockchain startups to conduct ICOs from the perspective of investor protection.
But he did say that crypto exchanges should be offered banking services such as account set-ups. “Exchanges should be able to persuade banks to issue bank accounts to them”.
Another senior government official, Hong Nam-ki, chief of the Office for Government Policy Coordination, says the government will announce its stance on ICOs soon following the compilation of the survey.
Momentum has been gathering among legislators of the party in government in recent months to push through laws that give a clearer framework for cryptos and ICOs.
The chairman of the government’s national policy committee, Min Byung-doo, recently called for ICOs to be regulated as a ban on them imposed in September 2017 is driving out promising blockchain startups from the country.
The governor of the semi-autonomous province of Jeju, Won Hee-ryong, also proposed in mid-August that the province, which is made up of the island of Jeju, be made into a blockchain hub allowing ICOs.