A week ago, South Korean regulators announced that they will be banning all Initial Coin Offerings (ICOs). The ban has yet to be implemented and many startups have decided to take action against the call of regulators to ban ICOs.
Many renowned leaders of the blockchains have said that the ICO ban has no legal stature in the country. An article published in Forbe's further clarified this:
“Local crypto industry leaders argue that the ban is legally groundless. They fear overregulation will push local talent and currency to more welcoming jurisdictions like Switzerland, Singapore and Japan.”
Kevin Helms, an author of a cryptocurrency news website, reported that:
“The news outlet elaborated that ‘the decision to ban ICOs as a fundraising tool was made as the government sees such issues as increasing the risk of financial scams.’”
The ban caught many by surprise
The crypto industry in Korea was caught by surprise when the government announced to implement a total ban on all ICOs. The industry was expecting some kind of negative backlash from the government but such a severe ban was not unexpected. The timing of the ban was interesting, as the regulators announced to ban ICOs on the Thanksgiving holiday, which did not give the companies ample time to react, as their offices were closed.
Industry decides to unify
Forbes reported that Kim Tae-won, the former chairman of the Korean Blockchain Promotion Association and CTO of Glosfer, is trying to get backing from the crypto community to fight the ICO ban. Tae-won is preparing a petition that would prevent the government from banning the ICOs. The petition simply states that the regulatory authority has not carried out the sufficient assessment to come to such a decision. Furthermore, the petition calls for the regulatory authorities to gather more information before making a final decision. According to Tae-won:
“Glosfer hired a law firm that has determined that ICOs cannot be penalized under existing laws. The blockchain association will then ‘face it head on’ with the National Assembly by the end of October.”
The ban was rushed
According to the Forbes article, Tae-won states that the government took a hasty decision to ban the ICOs and the decision was promoted by pressure from influential regulators and government agents. The presence of scammed and illegal ICOs probably expedited the ban, he stated.
The cryptocurrency community, as a whole, has found itself to be immune from such bans. This can be seen in the case of the China crisis, where despite the ban, key features of bitcoin and other cryptocurrencies allowed the industry to recover. The industry simply moves to another country with friendlier regulations, as was observed from the China scenario.