Hong Eui-rak of the ruling Democratic Party of South Korea is leading a group of 10 politicians in pushing a bill to legalise ICOs, according to The Korea Times.
ICOs have been illegal in South Korea since September 2017, and this is the first challenge to the ban. That said, the group aims to legalise only ICOs from research centres and public organisations that are focused on developing blockchain technology – no mention of the fundraising activities of private companies was made in the report.
The new bill was written according to a study conducted by Eui-rak’s office in conjunction with the Korea International Trade Association. The group aims to get the bill passed this year.
“The bill is aimed at legalizing ICOs under the government’s supervision,” said Eui-rak on Wednesday, speaking at a forum on ICOs and blockchain technology at the National Assembly. “The primary goal (of the legislation) is helping remove uncertainties facing blockchain-related businesses.”
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National Assembly Speaker Chung Sye-kyun said: “Blockchain and cryptos can be used in various public sectors for good causes. Given their potential, we need to work to help reduce political uncertainties they face.”
The country’s financial watchdog, the Financial Services Commission, banned ICOs “to prevent consumers from damaging the market because they are overheating due to a surge in demand for speculative receivables, triggered by an increase in ICO fraud,” according to FSC vice-chairman Yong-bum. It also completely banned leveraged trading at cryptocurrency exchanges. Leverage is when exchanges extend credit to customers.
Despite this restriction, the industry is booming in South Korea. Bithumb, the country’s largest exchange, handles nearly $1 billion in daily trading volumes and reported profits of 427.1 billion won (approx. $399.7 million) in net profit for 2017, 171 times more than what it earned in 2016.
This is because cryptocurrency is so popular in South Korea that people were still buying it despite the fact that the price of Bitcoin there was much higher than it was anywhere else.