Documents, the on 24. October have been published on the official website of the South Korean Financial Services Commission (FSC), to warn investors to be investing in crypto currency Fund carefully. The FSC warns investors not to be deceived, that the public crypto-currency funds are legitimate investment instruments, which correspond to the South Korean capital market act.
The FSC explained that public capital must be approved procurement measures, and registered in the Commission in order to comply with the capital market law. Companies that participate in such crypto-funds, are not incompatible, however, against the law, because these measures approved or in accordance with the law are registered.
The Financial Services Commission announced that it intends to take action against crypto-Fund, while it keeps with the competent Supervisory authorities shall be consulted, in order to protect the investors against the risks of possible financial losses.
The Chairman of the FSC, Choi Jong-koo, had claimed at the beginning of the month, that the existing uncertainties in relation to ICOs, as well as their potential harm to investors, “be serious and obvious,” and reiterated its negative attitude toward digital currencies and Initial Coin Offerings. The Chairman also referred to other countries that have banned this type of fundraising, while he spoke at a parliamentary Audit session of the Commission of the national Assembly (National Assembly commision).
Since September 2017, all types of ICOs have been banned in South Korea, to justify what the authorities are trying to, by explaining that the sale of ICO-Token requires too much control and supervision. Even if proposals for the withdrawal followed the original ban remains in force. In July, the FSC announced its plans to set up a Department that will concentrate exclusively on political decisions in connection with the domestic Fintech and crypto – currency industry.
11. October, during the parliamentary Audit session of the FSC, expressed to the Chairman his concerns: “The government denies the potential of the Blockchain-industry. But I don’t think we should put the business with the crypto-currency trade with the Blockchain-industry.“ He reiterated his point further with the words: “Many people say that the Korean government should allow ICOs, but ICOs can bring uncertainty, and the potential damage they may cause is too severe and obvious. For these reasons, many foreign countries prohibit ICOs or are you restrained“.
On 2. October, a member of the South Korean national Assembly called on the government to open the ICOs “the way” by taking a more lenient attitude in the rules. The law specialist of the Democratic party of Min Byung-doo said that the party will prepare to the next session of the national Assembly a project for the legislation of the ICO.
South Korea increased the tax on stock exchange transactions
The law proposal, the crypto-currency industry and the Blockchain industry certification as a Venture company to exclude, has been adopted and enters into force immediately. The change in the law means that Korea’s domestic Blockchain industry, including cryptocurrency exchanges, is deleted from the official classification list of government-certified Venture company.
The adoption of the first proposal of the South Korean Ministry would mean that a crypto-currency based Start-ups and Exchanges, tax credits and other financial incentives for domestic Start-would lose ups and small businesses. The restrictive policy against the Blockchain sector takes place in spite of the own commitment of the domestic government to invest alone in the year 2019, over 1 trillion Won (885 million dollars) for the development of selected technologies, including Blockchain.
Important Korean exchanges, such as the UPbit and Bithumb that are currently certified as a Venture company, will soon lose their tax advantages. Lobby groups such as the Korea Blockchain Association, the Korea Industry Promotion Association and the Korea Blockchain Start-up Association warned that “the measure will discourage the industry as a Whole”, by which they expressed their obvious displeasure.
An unnamed source in the industry told Business Korea: “The measure does not imply that the government only looks at crypto currency exchanges, but also any Blockchain-related Venture company, and company as gambling.”
The crypto-currency exchanges will have to meet the burden by doubling its corporate and personal income taxes, while they simultaneously lose the 75% reduction in acquisition taxes. Also, you will have no privileges such as guarantees for loans. New Start-ups seem to have a hard road ahead, according to a report from Business Korea: “In the framework of the new government policy of crypto-Exchanges that will be established this month or later, and can be, not as a Venture company certified”. The lack of tax benefits will hinder the research and development of the industry and could even lead to Start-ups will move abroad to a more favourable jurisdiction.
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This article was from English into German:
Senior IT Consultant and Crypto Enthusiast always in search of interesting news.