An electronic board shows the exchange rate between the South Korean Won and Bitcoin at a cryptocurrency exchange in Seoul last December. Photo: Reuters/ Kim Hong-Ji

In the world of crypto, what happens in South Korea doesn’t stay in South Korea. This market carries a large slice of the global crypto trade so any changes or movements have wide-reaching implications, on crypto sentiment and price, across the world.

Over the past few months there have been mixed messages from the government towards crypto-currencies and initial coin offerings, with no clear regulatory direction or stance.

But that could change. According to local media, a group of lawmakers from the ruling Democrat Party of Korea are leading a move to overturn the government’s domestic ban on ICOs. Their move follows a joint study by the party and the Korea International Trade Association.

The new bill, that seeks to legalize future ICOs, but not all of them, will primarily focus on coin offerings initiated by public organizations and research centers which are committed to promoting and developing blockchain technology. If successful, ICOs will be subject to supervision by the Financial Services Commission and also the central government Ministry of Science and ICT.

“The bill is aimed at legalizing ICOs under the government’s supervision,” Democrat Party lawmaker Hong Eui-raks said. “The primary goal [of the legislation] is helping remove uncertainties facing blockchain-related businesses.”

According to domestic news reports, the Korean industry seems to think the bill will not come into effect until later this year or early next and will not have any impact on local crypto exchanges or trading within the county. However, with an increasing number of scams and failed ICO projects, there is a general acceptance in South Korea that there is a great need for a solid regulatory framework, similar to that already in place in Japan.

Far East Asia is currently the epicenter of crypto-currency trading with the top four exchanges by trade volume located in the region. Hong Kong and Singapore remain the magnets for the industry with welcoming policies and few restrictions while, conversely, China, India and Thailand continue to crack down, with constraints on exchanges and bank involvement or heavy taxes on trading.

If South Korea does re-open its digital doors to ICOs there should be a flood of startups heading for this newly liberated and burgeoning market.

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