In September 2017, at the height of the initial coin offering (ICO) mania, South Korea’s financial regulator, Financial Services Commission, banned all token sales, taking after neighboring China. Now, the watchdog wants this ban reversed and is calling for regulation in the sector. According to the local outlet Money Today report, the Financial Services Commission (FSC) may be changing its stance on ICOs.
FSC’s vice chairman calls for the reversal of the ICO ban.
The FSC’s vice-chairman Do Gyu-sang argued that the country should reexamine its hardline stance against ICOs and, rather than impose a blanket ban, should regulate them. While speaking before the Political Affairs Committee in the Korean National Assembly, the vice-chairman told the committee that his agency believes ICOs should be included in the country’s Capital Market Act, which governs the Korean securities market. “We cannot delay the ICO any longer. (ICOs) must be included in the Capital Market Act. To do that, we need to revisit some provisions and look at the relationship with the (Virtual Industrial Rights Act) enactment or special law,” he told the legislators.
FCA believes there needs to be more stringent guidelines for ICO issuers.
If the ban is reversed, the financial regulator believes there would need to be more stringent guidelines for ICO issuers to stop scammers from exploiting investors. ICO issuers will be required to disclose all the cryptocurrencies involved, the supported technology, its backers, and such crucial data to the regulator before they are allowed to fundraise. They will also be required to adhere to all other legal requirements that apply to stock market listings. According to the regulator, once the issuer raises funds from investors, they must deposit all the funds in a bank and detail all transactions in the accounting report.