The South Korean Presidential Transition Committee has proposed a cryptocurrency framework to promote the expansion of the digital asset industry.
The Digital Asset Framework Act seeks to foster a climate of responsible growth based on investor trust. It will put in place investor protection measures and increase “transaction stability,” which refers to token-related activities such as NFTs and exchange listings.
Surprisingly, the suggestions also include the decriminalization of domestic Initial Coin Offerings (ICOs). Details indicate that authorities will differentiate between’security’ and ‘non-security’ ICOs.
“it is planned to establish a regulatory system in the form of ‘security type’ and ‘non-security type’ such as utility and payment settlement depending on the economic substance of virtual assets.”
Will ICOs make a comeback?
ICOs are a method for new crypto projects to raise funds. Although they’ve been there since 2013, with the introduction of Mastercoin’s ICO, it wasn’t until 2017 that people started paying attention.
Back then, bitcoin values were skyrocketing, and it was normal for early ICO investors to become millionaires overnight. During this period, 800 ICOs were launched, raising a total of $20 billion.
However, because they were unregulated instruments, many of those ventures were scams aiming to profit on the market’s enthusiasm. According to research, up to 80% of ICOs launched during the ICO Boom were scammers that grabbed investors’ money and discreetly exited.
In September 2017, South Korea outlawed ICOs, and China followed suit around the same time. Given their poor image, new fundraising strategies such as Initial Exchange Offerings, Initial Securities Offerings, and Initial Stakepool Offerings have taken their place.
The Digital Asset Framework Act has prepared the environment for ICOs to make a comeback.
The crypto-friendly President keeps his word.
Pro-crypto Yoon Suk-yeol won South Korea’s presidential election in March 2022, defeating political challenger Lee Jae-myung by less than 1%.
Yoon had promised to implement policies to legitimize the cryptocurrency business, including the lifting of the ban on ICOs.
Some were doubtful that Yoon would follow through, like Han Dae-hoon, an Analyst with SK Securities, who said, “we won’t know until we see it.”
Yoon, on the other hand, appears to be moving quickly, with his inauguration date planned for May 10.