On October 11, Chairman of Korea’s Financial Services Commission Choi Jong-koo reaffirmed his negative stance against virtual currencies and initial coin offerings (ICOs) in a statement given to Korea’s National Assembly. This comes a week after the chairman of South Korea’s National Policy Committee Min Byung-Doo delivered a speech to the National Assembly urging Korean regulators to legalize initial coin offerings.
“The government does not deny the potential of the blockchain industry,” Choi Jong-koo said at the parliamentary audit session of his commission at the National Assembly. “But I think we should not equate the cryptocurrency trading business with the blockchain industry.”
Chairman Choi warned that the support that many Korean government officials have begun to publicly show for ICOs is misguided.
“Many people say the Korean government should allow ICOs, but ICOs bring uncertainty and the damage they can cause is too serious and obvious,” said Choi. “For these reasons, many foreign countries ban ICOs or are conservative towards them.”
Choi has been consistent on his stance against ICOs since the cryptocurrency market crashed at the beginning of 2018. Korea has one of the largest cryptocurrency markets in the world, but the country has had to bear the burden of suffering through countless scam ICO campaigns and cryptocurrency exchange hacks.
Chairman Choi also touched on controversy springing up in Korea surrounding commercial banks not issuing real-name accounts to some exchanges.
“Exchanges should be able to persuade banks to issue bank accounts to them,” said Choi.
Some Korean Leaders Favor Regulation over a Ban
In contrast, last week, Chairman of South Korea’s National Policy Committee Min Byung-Doo encouraged the National Assembly to legalize ICOs. Min argued that the nationwide ban on all ICOs, which was passed into law in September of last year, will cause Korea to fall behind amidst a technological revolution that shows no signs of stopping. Min stated that he was confident that the National Assembly could protect investors while at the same time supporting innovation by passing sensible regulation.
“Regulation is not bad. Regulation is necessary. It is the only way to legitimize the market and allow investors to build trust towards the cryptocurrency market,” Min said.
South Korea’s ICO ban has yet to go into full effect, and while Min aknowledges the dangers of ICOs, particularly instances of fraud, speculation and capital laundering, he believes that a federal white paper analysis program and an ICO rating system could help protect investors.
“Let the government, the National Assembly and the blockchain association immediately form a working group to block fraud, money laundering, speculation, and develop the block-chain industry,” Min said. “We can see that the flow of investment is clearly changing compared to ICO and angel fundraising. The ICO has raised $1.7 billion for Telegram and $4 billion for Block.One. It is getting bigger and bigger.”
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