It was in September 2017, when South Korean officials made the decision to ban initial coin offerings (ICOs) being held in their jurisdiction. This decision came shortly after China had made a similar move.
This was at a time when there was little to no regulations or oversight in place in the sector and there were numerous high-profile incidents that have the sector a bad name. However, over time the sector has become more and more mainstream, with established companies becoming involved in the space and using it to raise funds for their projects. For example, the messaging app Telegram raised almost $2 billion through the ICO they held at the start of 2018.
South Kore has been busy introducing rules and regulations focused on the blockchain and cryptocurrency sector. Many are of the belief that when these guidelines have been fully completed and released that they may decide to legalize ICOs once more.
The National Assembly has been discussing the issue, particularly because a failure to look at ICOs once more could lead to the country slipping back in terms of their competitiveness going forward.
There are a number of high-profile officials who are pushing for legalization. There was a blockchain technology forum held on the 2nd of October and there were numerous issues concerning crypto and ICO laws that were discussed.
There was a feeling by some that the governed had been neglecting the sector and that they were falling behind other major economies throughout the world in their adoption of blockchain technology.
The majority of blockchain startups exited out of South Korea after the ban was introduced. They preferred to be based in an environment that wasn’t hostile to what they were trying to do.
This has caused a pronounced brain drain in South Korea and they are losing out on a lot of innovation. There are hopes that the legalization of ICOs could entice these companies to re-enter the country.