After the ICO ban in 2017, South Korean corporations and startups have found a way around the ICO ban through launching overseas crypto and blockchain subsidiaries and doing the token sales in abroad.
South Korean startups issue tokens in foreign jurisdictions
South Korea has been one of the most crypto favorable nations up until September 2017 when the regulators of the country decided to ban the ICOs. This led to a chaos in the Korean cryptocurrency market. However, companies have worked out a number of solutions to bypass this ban while keeping the government content at the same time.
Icon (ICX) is a blockchain project that is building a unified platform to launch ICOs while offering its ICX token for facilitating fast payments. But with South Korea’s move to ban the ICOs, the company made a move to keep on running its business by registering and issuing tokens out of the country i.e. in Switzerland while keep on operating its business in Seoul.
This simple yet effective move worked in the company’s favor as they are now even allowed to trade on the leading cryptocurrency exchanges of the South Korea viz. Upbit and Bithumb. Investors in the country are again hopeful as being the first platform of South Korea, the listing of Icon in local exchanges’ holds a significant meaning. As per coinmarketcap, ICX is currently trading at $3.49.
Local investors are appreciating this development as evident from an investor’s statement:
“The cryptocurrency market’s future seemed unclear as the market has constantly been declining for the past few months. Such disappointment made me think maybe I should stop investing, and that’s when I found Icon.”
Corporations launch overseas crypto & blockchain subsidiaries
The ICO ban did slow things down but they didn’t stop completely. Despite the ban, startups haven’t put a stop to this fundraising method. Companies are taking the route of domiciling their ICOs abroad then listing them on domestic exchanges. There have also been unconfirmed reports of the country rethinking its harsh stance on ICOs.
Due to the restrictive regulations, South Korean corporations are also establishing blockchain and cryptocurrency subsidiaries abroad. Recently, Kakao Corp and Line’s Naver made the announcement of blockchain and crypto subsidiaries in Japan.
Local sources reported that in March, numerous health companies like My23 Healthcare, Medibloc and Zikto also made plans to launch their ICOs abroad. Another company Hyundai BS&C is also launching its ICO in Switzerland. Organizations like Paxnet and Theloop, a subsidiary of Dayli Financial Group have established their ICO foundations in Switzerland as well.
Last month, the Korea Times reported that though the ICOs are currently banned in South Korea, the government might get them covered in the future regulations. Apparently, the authorities of the country are already in talks with related government offices like justice ministry and tax agency to allow token sales under certain conditions.
Meanwhile, the regulators want the startups to be transparent about their dealings. Moreover, it would be far easier and less expensive for authorities to allow local startups to launch their ICOs locally.
Do you think launching the ICOs abroad will boost the South Korean crypto market again?