Amid increasing investment in blockchain technology across the globe, calls are growing that the South Korean government should come up with a policy on initial coin offerings (ICOs). Critics note that the South Korean government’s ban on ICOs does not make much sense as many Korean companies are establishing their subsidiaries in other countries to make an ICO.
Officials from blockchain companies and law firms in Singapore criticized the government for its ambiguous attitude toward ICOs. The government announced a total ban on all kinds of ICOs in September last year but it hasn’t said how it would implement the ban and on what law the policy would be based.
A CEO of a company that successfully completed an ICO through a subsidiary in Singapore said, “It takes at least 200 million won to 300 million won (US$179,775 to US$269,663) to launch a subsidiary in Singapore and receive consulting services. We also need to pay taxes according to the Singapore’s laws when we convert the virtual money raised with an ICO into real money in order to begin a business.” He added that it was a shame that he had to spend hundreds of millions of won in Singapore, not in South Korea.
Another CEO in a meet-up event in Singapore said that he is now seeking for law firms and consulting service providers in Singapore in order to make an ICO. He said, “When I talked to foreign companies, they did not understand why South Korean companies were trying to make an ICO in other countries instead of South Korea. Foreign firms come to South Korea to meet South Korean investors but South Korean companies are trying to attract investors in other countries.”
An executive from a company that provides consulting services to South Korean companies in Singapore said, “There are a lot of companies that are seeking to make an ICO in Singapore but most of them come to Singapore without knowing Singapore’s ICO regulations. So, I am concerned that there might be problems, like taxes, later. If the South Korean government presents a clear standard, they wouldn’t come to Singapore and take risks to do a business.”