South Korea is reportedly putting a plan together that will permit initial coin offerings (ICOs) for domestic traders, despite initial reservations with the market.
The Korea Times reported an unnamed source as saying:
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.
If introduced this plan will be a significant reversal considering South Korea’s financial regulator, the Financial Services Commission (FSC), banned ICOs last September. During a meeting at the time, the regulator prohibited domestic companies and startups from taking part in ICOs.
Notably, according to the Times, the regulator didn’t enforce the ICO ban and hasn’t ordered companies to return ICO funds. Not only that, but companies have been able to continue investing money into foreign ICOs and cryptocurrency exchanges within the country.
Kang Young-soo, who oversees cryptocurrency trading policies at the FSC, said that the regulator has taken a ‘third-party view’ of the situation, but declined to provide specifics on the issue.
Another source said that South Korea would only implement the new plan to permit ICOs once the country has established the foundation for crypto trading, adding:
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.
This news comes at a time when South Korea appears to be loosening its tight hold on the crypto market.
Last month, it was reported that the South Korean government was considering a licensing system similar to New York’s BitLicense as a way of regulating digital currency exchanges in the country. At the time, an official from the government ministry taking part in the digital currency task force, said:
We are positively considering the adoption of an exchange approval system as the additional regulation on cryptocurrencies. We are most likely benchmark the model of the State of New York that gives a selective permission.
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