South Korea's Financial Services Commission (FSC) might reconsider its ban on initial coin offerings (ICO) introduced back in 2017. According to a report by Money Today, Do Gyu-sang, Vice Chairman of FSC, suggested to consider a revision of the requirements for the financial reporting of companies that are looking to conduct an ICO.
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"We cannot delay ICOs any longer. ICO must be included in the Capital Market Act. To do that, we need to revisit a few provisions and look at the relationship with the Virtual Industry Rights Act enactment or special law, so if we discuss some bills together, it would be much better to do revision," said Gyu-sang.
According to the draft submitted by the FSC, ICOs legalization would require companies to publish a detailed whitepaper, token or cryptocurrency type, public offering fund usage plan, underlying technology, and risks related to project implementation.
The status of holding of virtual assets of the issuer and related parties, transaction risk (possibility of loss, etc.), fees, taxes, consideration for listing, and important matters for management should also be included. Issuers are also obligated to disclose financial information on their holdings in accordance with the External Audit Act.
The move comes shortly after the FSC said it will start taxing transactions with non-fungible tokens (NFTs) from 2022. According to Do Gyu-sang, NFT tokens will be taxed according to the current tax rules for cryptocurrencies.
The Korean FCS prohibited ICOs in September 2017 and promised "stern penalties" for violations. The watchdog said all kinds of ICOs are banned as trading of cryptocurrencies needs to be tightly controlled and monitored.
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