South Korea to remove ban on ICO; new crypto regulations underway

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With the new president-elect Yoon Suk-yeol proclaiming the legalisation of cryptocurrency fundraising, South Korea has become the latest country to reform cryptocurrency regulations and remove the ban on Initial Coin Offerings (ICOs).

The Financial Services Commission (FSC) of South Korea had banned Initial Coin Offerings (ICOs) in 2017. According to the commission, the prohibition was prompted by crypto's high volatility and speculation, and illegal activity within the country. The legal body had also prohibited all sorts of virtual currency fundraising. Its principal goal in enacting the ban was managing and monitoring virtual currencies.

Initial coin offerings are part of Yoon's wider cryptocurrency pledges. The President-elect's administration has promised to carry out 110 tasks, including improving crypto regulations and lifting the prohibition on ICOs in South Korea. The government will reportedly create a two-lane regulatory framework for ICOs, defining digital assets as securities and non-securities.

Yoon Suk-yeol also stated that he would advocate for deferring taxation on crypto investment gains at least until the Digital Asset Basic Act (DABA) is passed. The crypto tax in South Korea was supposed to start in the fiscal year 2022, but it was postponed until 2023 last December.

According to reports, Yoon is looking to ensure that the crypto tax bill does not take effect until adequate consumer protection legislation is established, which may be around 2024. The contested crypto tax law, which has been postponed again, would impose a 20% tax on crypto investment gains exceeding $2,100 per year.

The writer is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash