Last week, South Korean regulators said they would ban all initial coin offerings. They are imposing a “prohibition on all forms of ICOs.” However, they have not implemented this ban yet. Now, startups in the area are pushing back against the impending ban.
Also read: An Inside Look at Genesis Block — Hong Kong’s New Cryptocurrency Working-Space
Leaders in the regional blockchain industry have said an ICO ban has no legal grounding. A Forbes article clarified, “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.”
News.Bitcoin.com covered the issue when South Korea made the decision. Author Kevin Helms talked about why they issued the possible banning. He said, “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 Crypto Community is Surprised by the Announcement of a Ban
Members of the Korean community were still surprised by the governments’ hasty decision to ban ICOs. They knew a negative announcement on ICOs were coming, but they did not foresee the implementation of a total ban. The CEO of Bitcoin Center Korea, John Ra, provided some commentary on the announcement:
We were expecting this kind of announcement, but we were surprised they used the words ‘total ban.’
He mentioned that the timing was interesting on the part of regulatory bodies. They brought up the desire to ban ICOs prior to Chuseok, or the Thanksgiving holiday. This caught many crypto companies by surprise, as they did not have ample time to respond.
Startups to Take a Stand Against Government
The Forbes article mentioned Kim Tae-won, the former chairman of the Korea Blockchain Industry Promotion Association and CTO of startup Glosfer, is gathering the crypto community to fight back. He is preparing a petition that would prevent the government from banning ICOs. The petition calls for regulatory entities to provide a deeper assessment and gather more information before making a decision to ban ICOs.
“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, Kim says.”
The Rushed ICO Ban and its Effects on Bitcoin
According to Forbes sources, Kim said the decision to ban ICOs was “rushed.” Kim also theorized that this hasty decision was caused by pressure from influential regulators and government agents. The fact that vaporous and scammy ICOs exist, probably expedited their decision to call for a ban.
Regardless of outcome, every time these countries rush to ban ICOs, Bitcoin suffers temporarily. The cryptocurrency market ecosystem functions in unison. Still, bitcoin and other cryptocurrencies have always manage to recover even when governments try to attack them.
It will be interesting to see if the South Korean Bitcoin and cryptocurrency community can come together to stop government regulators from interceding in the market. They seem to believe the ICO ban can be reversed.
Do you think the South Korean crypto community will be able to fight back against regulation and bans? Let us know in the comments below.
Images via Shutterstock
Do you want to vote on important Bitcoin issues? Bitcoin.com has acquired Bitcoinocracy, and rebranded the project to Vote.bitcoin.com. Users simply sign a statement with a non-empty Bitcoin address and express their opinions. The project focuses on determining truth backed by monetary value and transparency.