South Korea’s ICO Ban Under Fire As Startup Files Constitutional Appeal Against Government
Presto, a blockchain startup with its offices in South Korea has said it will file a constitutional appeal challenging the year-long blanket ban on all activities related to initial coin offerings (ICOs).
South Korea imposed a ban on ICOs in the country in September 2017, mainly due to what the authorities said were regulatory concerns.
That ban has however been challenged severally, with the government facing accusations that it acted unconstitutionally in effecting the prohibition.
According to news reports published by a local media outlet, the government’s failure to provide clarity over the matter has affected the activities of Presto, which now wants the court to determine that the ban is unconstitutional.
Presto’s chief executive Kang Kyung-won said that their company had had several considerations, including “setting up an overseas corporation to issue tokens.”
However, Kyung-won emphasized that they have waited long enough for the government to take concrete steps on the matter of ICO sales. He added that it’d been more than a year yet the government was yet to issue any guidelines or regulations for the market.
He explained that that was the basis of their decision to go to court; to have it declare the “unconstitutionality of the lack of legislation.”
According to Presto, the ban is also an infringement on “people’s freedom of occupation and property” as well as the basic principles of equal rights.
Kyung-Won also alluded to the rapid technological advancement that has come with the developments in the blockchain industry, saying that an ICO ban is illegal and pre-modern and “should not exist any longer.”
“As a blockchain startup company, we face a lot of difficulties due to the ICO ban and the lack of legislation from the government and the Parliament.”
Presto is a platform that provides a “total solution to development teams,” including website building and token issuance services. The firm has been looking to hold the first Decentralized Autonomous Organization-based Initial Coin Offering (DAICO) in the country.
A DAICO utilizes smart contracts that participants can trigger to vote for refunds in case they lose trust in either the team or the project. It is a relatively safer way of raising funds compared to ICOs- of which many have failed to deliver projects while some have turned out into exit scams.
The tough stance that South Korea has over the ICO field in the country contrasts sharply with what has happened in the tiny Mediterranean island state of Malta in the last one year.
“The Blockchain Island” as EU’s smallest nation has come to be known, recently enacted three crypto related bills that have seen it become one of the most crypto-friendly destinations in the world.
Apart from hosting the Blockchain Summit, the Maltese government has also been instrumental in the formation of a seven-member Southern EU blockchain group that includes countries like Spain and France.
All said, however, the crypto industry in South Korea remains one of the most active, with trading volumes continuing to grow every other day.
Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.