Ahead of the announcement of how initial coin offerings (ICOs) are being operated in Korea, Financial Services Commission (FSC) chairman Choi Jong-koo has evaluated companies’ ICO concreteness and refund procedures as “quite insufficient.” This suggests that the Korean government would continue to ban ICOs.

Speaking at the Special Committee on the Fourth Industrial Revolution of the National Assembly Wednesday, Choi said ICOs, which ultimately mean doing business with other people’s money, are conducted easily just with brief business plans. “Then, the business should be transparent and concrete and there must be an apparatus to return funds. But our fact-finding survey of ICOs has left much to be desired in the two aspects.” The FSC and the Financial Supervisory Service (FSS) are investigating 22 ICOs that have been conducted previously.

The government plans to announce the results of its fact-finding survey as early as January under the initiative of the Office for Government Policy Coordination. “Our investigations have shown that companies usually have 2-3 employees but don’t have any specific business plan except for fund-raising,” said Choi, adding that some ICOs could be fraudulent because of exaggerated advertisement and we might have to cooperate with police and prosecutors.

With regard to America’s plan to allow ICOs, he said the United States would intend to be more tricky about ICOs by applying securities laws rather than permit them smoothly. “Such countries as Singapore and Switzerland allow ICOs targeting people of other countries while disallowing ICOs for their fellow countrymen,” Choi said. /edshin@decenter.kr

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