“By blocking ICOs in Korea, it is for the Republic of Korea to invest in foreign youth. It is unfortunate that the people are investing in coins made by foreign youths on exchanges.” (Heo Baek-young, CEO of Bithumb)
Representatives of the four major domestic cryptocurrency exchanges (Upbit, Bithumb, Coinone, and Korbit), who met Lee Jae-myung, the Democratic Party presidential candidate on the 19th, emphasized the need for an ICO-related system.
Why is ICO mentioned in a timely manner in a situation where money-making games (P2E) and non-fungible tokens (NFTs) have emerged as the mainstream in the blockchain industry?
◇So, what is an ICO?
ICO is a method in which a company (business entity) directly raises necessary funds using cryptocurrency. The company collects investment in powerful cryptocurrencies such as Ethereum, and in return, pays the investor with a self-issued cryptocurrency.
Unlike an initial public offering (IPO), an ICO does not have a lead manager and does not have clear listing standards or regulations, so it is possible to freely raise funds. With the ‘Bitcoin Investment Frenzy’ in 2017, the cryptocurrency market received the attention of investors, and ICOs also gained popularity.
At that time, as the number of domestic and foreign blockchain companies increased, the number of investors investing in their rosy future also increased. As cryptocurrency trading became active centering on them, the cryptocurrency trading market began to flourish in earnest.
However, as the number of companies disguised as block chains increased, the risk of fraud such as multi-level coins increased. In addition, as the market overheated due to increased speculative demand, the government eventually banned ICOs in September 2017 to minimize the damage to investors. At that time, the financial authorities expressed their strong will to block ICOs, saying, “If you have the technical skills, you can raise funds through an IPO or crowdfunding.”
At that time, the blockchain development industry vomited indignation, saying that ‘the buds of industrial development were cut off’. Concerns have also grown over the government’s decision to regard the ICO itself as a quasi-criminal act.
In the end, Korean blockchain companies that had difficulties in raising funds and promoting their business moved their business bases to Singapore and Malta. Regardless of the actual size, domestic blockchain companies that have issued cryptocurrencies have their business bases abroad. Kakao and Wemade are no exceptions.
Candidate Lee expressed his apology at the meeting on the same day for the government’s blocking of ICOs. Candidate Lee opened the event and said, “I think there was a problem with the fact that the development of the cryptocurrency market was delayed because the government fundamentally stopped the ICO and denied it as if there was none.” said.
◇Government that separates cryptocurrency from blockchain… Industry is growing abnormally
Representatives of the four major domestic exchanges expressed their regret that the government has denied cryptocurrency and insisted only on fostering blockchain technology. It is the opinion that the ‘ICO ban’ was the main culprit in the domestic cryptocurrency industry’s growth focused on ‘exchanges’.
Seok-Woo Lee, CEO of Upbit (operator Dunamu), evaluated, “There is no issuance of (in the domestic market, cryptocurrency), only circulation,” and said, “In the case of ICO, (foreign developers issue cryptocurrency) and It is a deformed structure in which consumers (investors) live.”
There are also claims that the government’s principle of separating blockchain and cryptocurrency has hindered young entrepreneurs. It is an opinion that, as ICOs are blocked, not only domestic capital has flowed abroad, but also the outflow of talent is significant.
Heo Baek-young, CEO of Bithumb, said, “The thing that prevents ICOs in Korea is that Korea invests in foreign youth.
He added, “ICO is necessary for young people to start their own business for the future industry,” he added. did.
Oh Se-jin, CEO of Corbit, said, “There were many tokens made by young Koreans among the globally promising tokens from 2017 to 2018. The contribution of young Koreans (to the cryptocurrency development market) was significant.” It is difficult. It is difficult to find a promising token with an identity in Korea.”
Exchange representatives continued their remarks towards Candidate Lee on the same day and agreed that a support policy to reinforce the domestic cryptocurrency and blockchain ecosystem is necessary. It is the opinion that preparing and permitting ICO-related legal systems will eventually help foster domestic blockchain development manpower.
◇ Lee · 尹 “I will review the ICO permit”
Candidate Jae-myung Lee, who had listened to the opinions of the cryptocurrency trading industry, said, “I think that (blocking ICOs in Korea) amounts to an outflow of national wealth.
Candidate Lee announced a pledge to promote the legalization of institutional recognition of cryptocurrencies to stimulate investment, and to review ICOs and security-type cryptocurrencies (STOs).
On this day, as a pledge, Candidate Lee presented ΔCryptocurrency legislation, ΔICO acceptance review, ΔSTO acceptance review, and ΔCryptocurrency ecosystem construction support. In accordance with his pledge, Candidate Lee plans to promptly reorganize the system that protects cryptocurrency investors and businesses and make the disclosure system more transparent.
Furthermore, after discussing with experts, Candidate Lee plans to prepare safeguards and review ICO and STO permits. STO means issuing rights to real assets in cryptocurrency, and investors who own the cryptocurrency can exercise their rights like shareholders. Candidate Lee is contemplating using STO as a new investment attraction method for small and medium-sized venture companies.
Yoon Seok-yeol, the presidential candidate for People’s Strength, also made a promise to allow ICOs on the same day. Candidate Yoon held a press conference at the central office in Yeouido on the morning of the 19th and said, “In the current situation, if the ICO method is fully adopted, there is a risk of damage to investors such as multi-level fraud. ) method,” he said.
In IEO, an investor invests in a company through an exchange, and the exchange becomes an intermediary. It has the characteristic that the exchange can reduce risk by playing the role of a validator and an intermediary between the project (developer) and investors.
