Updated: Jul 14
Initial coin offerings could be about to make a comeback in South Korea after a crypto-friendly candidate was elected president.
The conservative opposition candidate Yoon Suk-yeol narrowly won the contest — following a campaign that sought to woo younger voters who have enthusiastically embraced digital assets.
Both he and Lee Jae-myung, who represented South Korea's ruling party, had promised to roll back some of the tough regulatory measures that had been imposed during the five-year tenure of Moon Jae-in.
Yoon has vowed to establish a new Digital Industry Promotion Agency that would give the crypto and NFT sectors a clear set of rules to follow — given them a greater sense of legitimacy as a result.
The Korea Society of Fintech Blockchain, Kim Hyoung-joong, said crypto had become a focal point of the campaign because people in their 20s and 30s were floating voters. He told Forkast News:
"The 40s, 50s and 60s have already picked one candidate and they’re not changing."
Initial coin offerings — known as ICOs for short — have been fairly controversial in the crypto industry. New projects frequently used them as a fundraising method in 2017 and 2018, with little regulatory oversight. But past surveys that covered over 1,500 ICOs concluded that almost four in five of these projects were scams.
Yoon said that he sought to prevent this from happening again by ensuring that crypto exchanges served as middlemen during any ICO — potentially offering checks to see whether a project is legitimate.
In an attempt to show he was well-versed in the world of digital assets, the 61-year-old — a former prosecutor — had also released an NFT collection featuring images and videos of himself.
Change of the Guard
South Korea's Financial Services Commission had announced tough measures last year that meant all crypto exchanges in the country needed to meet stringent Know Your Customer requirements, or face having their websites blocked. Estimates suggest that more than 30 trading platforms ended up closing their doors as a result.
Yoon appeared to criticize these measures during a forum on virtual assets back in January, and was quoted by the Yonhap news agency as saying:
"To realize the unlimited potential of the virtual asset market, we must overhaul regulations that are far from reality and unreasonable … We must shift to a negative regulation system to ensure at least the virtual asset market has no worries."
The president-elect has previously stated that he wants to raise the threshold when crypto investors need to start paying taxes on profits that they make — from the current level of $2,000 to $40,000, which would be among the most generous worldwide.
Yoon has also suggested that he wants to cut red tape to ensure South Korea can be home to a greater number of crypto industry unicorns — startups that are worth more than $1 million.
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