It has been a year since the South Korean government has prohibited all types of initial coin offerings (ICOs) in September last year. In the meantime, the government has come up with conflicting policies of promoting blockchain technology while banning ICOs, instead of providing a minimum guideline for ICOs.
The government bans ICOs in the name of “investor protection” but there is no definite definition for virtual currencies nor regulations on unfair business practices. Accordingly, the number of fraud cases aiming for such legal blind spots is on the rise. In this regard, Jung Byung-guk, a leader of the nation’s third biggest Bareunmirae Party, came up with a legislative proposal related to cryptocurrency transactions. He will also hold a meeting, tentatively named “global blockchain and cryptocurrency conference,” at the National Assembly in October to accelerate the preparation of a guideline on ICOs, which are designed to protect users.
Jung held a meeting to set up a Korean ICO guideline at the National Assembly Member's Office Building in Yeouido, Seoul, on Aug. 29. At the meeting, he said, “Other countries are promoting ICOs as a means of helping startups attract capital. I am so upset to see the South Korean government sitting on its hands after prohibiting all types of ICOs. The National Assembly members have been also holding numerous meetings and seminars to revise and enact related laws but we haven’t found an answer yet.”
There is a consensus in the blockchanin industry that it is impossible to use specific standards in advance as the blockchain and cryptocurrency ecosystem changes every hour.
Jung mentioned his congressional diplomacy activities in March as a member of the “National Assembly’s blockchain and cryptocurrency global initiative diplomatic corps.” He said, “I visited the United Kingdom and Finland, which have more advanced digital financing and start-up and venture ecosystem than South Korea, and talked with economic and financial regulators and experts, but they didn’t have a clear answer either.”
However, Jung suggested that Gibraltar, where ICOs are launched actively, can be a benchmark. He said, “Gibraltar is under the UK so ICOs are very actively launched in the country based on an advanced financial system. Considering the fact that I find areas to improve in my own cryptocurrency transaction law proposal every time I read it again, we need to designate a regulation-free blockchain and cryptocurrency special zone or test zone first to actively make various experiments.”
He added, “We are planning to invite officials from government agencies and task forces related to blockchain and virtual currencies to the National Assembly in October to hold the global conference and issue a minimum declaration for ICOs. We hope that the declaration serve as a guide for countries in writing an ICO guideline that fits with their own political and economic situations.”