South Korea’s ban on ICOs may have slowed things down, but it hasn’t completely stopped the flow of new digital coins on local exchanges.
South Korean startups have not shut the door on this fundraising method, despite the ban, and are instead domiciling their initial coin offerings abroad and then listing their digital coins on South Korean exchanges. The development comes on the heels of a report suggesting that the country is rethinking its harsh stance on ICOs altogether.
South Korea unleashed its clampdown on the cryptocurrency markets in September 2017, when it banned ICO listings in the country, as CCN previously reported. The move threw a wrench into cryptocurrency trading volumes there, where the bitcoin price is known to trade at a hefty premium versus other markets. Meanwhile, there was scuttlebutt last month that South Korean investors may be scooping up Luxembourg-based bitcoin exchange Bitstamp in a deal worth approximately $400 million, though those reports remain unsubstantiated at this point.
Meanwhile, the tide is beginning to turn for ICO issuers, as evidenced by ICON (ICX), a new coin developed by Seoul-based fintech DAYLI Financial Group but issued in Switzerland. The ICON Foundation is registered in Switzerland but operates out of Korea.
South Korea’s top two cryptocurrency exchanges, Bithumb and Upbit, support Icon for trading where the new coin has been listed since March. Just as South Korea followed in the footsteps of China to ban ICOs, the issuing companies have found a way to bypass the rules. ICON has been a profitable investment so far, having started trading at $0.11 and soared to $2.64, or KRW 2,814.
NH Investment and Securities cryptocurrency analyst Park Nok-sun told Reuters the listing on the South Korean trading platforms is “significant” because it’s the country’s “first platform coin” developed on code that can also support other applications. It’s been compared to the Ethereum network.
ICON isn’t the only Korean digital currency to have bypassed the ban. A trend has developed in which approximately 12 companies have similarly launched ICOs overseas but listed their coins on Korean exchanges, including Hyundai subsidiary Hyundai BS&C, an Internet of Things startup that similarly chose Switzerland for its Hdac token generating event.
Hdac was atop the leaderboard in December 2017, having raised $258 million in its ICO, according to Hacked.com.
Meanwhile, South Korean regulators want South Korean startups to be transparent about their international deals but don’t plan to stand in their way, according to Reuters. Meanwhile, it would be much easier and less expensive for South Korea to allow local startups to launch their token sales locally once again.
Seoul city image from Shutterstock.
Last modified: May 20, 2020 8:52 PM UTC