According to the Korea Times the ban on ICOs may soon be revoked by the very same financial authorities that banned ICOs last year. If the source is accurate the move would mark a massive u-turn for financial regulators in South Korea who banned ICOs outright in September last year. An anonymous source told Korea Times:
“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,”
Many consider the ban to be a ‘soft-ban’ as ICO companies that raised before September 2017 were not forced to refund investors. Whereas the Chinese ban on ICOs forced ICO teams to refund investors fully.
A spokesperson from the South Korean Financial Services Commission (FSC) said that the group had officially not yet come to a decision as to whether they would be unbanning ICOs.
“There are many speculating about the possibility of allowing ICOs. The FSC has acknowledged a third-party view regarding the issue, but there's nothing that we can say officially at the moment,”
The two main concerns for the FSC regarding cryptocurrencies are the taxation and anonymity questions they raise. As such part of the deal for unbanning ICOs would require issuers and investors to disclose AML and KYC information to reduce the possibility of the tokens to be used to money laundering or tax evasion.
South Korean Demand For Crypto
Despite banning ICOs in September of last year the demand for cryptocurrencies in South Korea has been high. At times in December the ‘Kimchi premium’ hit 50%. In other words, the Korean markets were paying a premium of 50% for cryptocurrencies in comparison to the USD markets.
As can be seen in the chart below the ‘Kimchi premium’ on bitcoin has been closed down to almost 0 representing a cooling down of the South Korean markets.