Months after South Korean officials banning initial coin offerings (ICOs) claiming cryptocurrencies were not financial products nor currency, Korean financial authorities may now be taking a new approach to the popular method of raising capital.
According to an anonymous source for The 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."
The news comes as an increasing number of investors are paying attention to ICOs which have been known to offer the potential of massive returns on investment.
ICOs were banned in Korea last September due to a lack of trust and little to no regulation causing short term panic in cryptocurrency markets around the world. While the ban did little to stop Korean entrepreneurs from raising funds for ICOs by reaching across country lines, the new legislation could restore confidence and allow for a more regulated and trusted ICO system.
According to the source, ICOs would involve local banks, the justice and finance ministries, and the tax agency to generate much needed transparency for investors. Another anonymous source commented:
"Various scenarios such as the imposition of value-added tax, a capital gains tax, or both on trade; and the collection of corporate tax from local cryptocurrency exchanges, as well as the initiation of authorized exchanges with licenses are being discussed."
For the Korean market which has become a popular hub for cryptocurrency ventures this demonstrates a substantial work-in-progress between the government and individual. Kang Young-soo, who oversees cryptocurrency trading policies at the Financial Services Commission (FSC), says regulators are discussing the possibility of allowing ICOs but have yet to come to a firm decision on the matter.