Regulations Driving Away Businesses
An increasing number of corporations in South Korea are establishing cryptocurrency and blockchain subsidiaries abroad due to restrictive regulations. Money Today elaborated:
Korea’s largest Internet and mobile companies have left Korea one after another as they entered virtual currency and blockchain businesses.
Many companies are leaving Korea because the government has banned initial coin offerings (ICOs), the news outlet noted and recalled financial authorities declaring last September, “We will ban ICOs in all forms, regardless of technology or terminology.”
Former lawmaker Jeon Ha-jin was quoted by the publication, “global blockchain companies are watching Korea, but the government has kicked out opportunities.” Calling for full legalization of ICOs, he conveyed that the government’s ban on ICOs has blocked funding for companies entering the crypto and blockchain space.
Corporations Seek Opportunities Abroad
Recently, the parent companies of the two most popular chat apps, Line’s Naver and Kakao Corp, announced that they have established crypto and blockchain subsidiaries in Japan. The operator of Kakao Talk established a blockchain subsidiary called Ground X. Naver established a subsidiary called Line Financial which has applied for a license to operate a crypto exchange with the Japanese Financial Services Agency (FSA).
In March, Business Korea reported that South Korean healthcare companies are increasingly launching their ICOs abroad including Zikto, My23 Healthcare, and Medibloc, adding:
Domestic companies are leaving South Korea and setting up a subsidiary overseas, like Singapore and Gibraltar, to run ICOs.
Hyundai BS&C, an affiliate of South Korean conglomerate Hyundai group, also recently launched its ICO in Switzerland.
Korean startup Theloop, a subsidiary of Dayli Financial Group, launched an ICO and set up a foundation in Switzerland as well. Dayli Financial also owns one of South Korea’s largest crypto exchanges, Coinone.
Park Chang-ki, chairman of Governtech and founder of major financial information portal, Paxnet, also established a foundation in Switzerland and launched an ICO.
While token sales are currently banned in South Korea, the Korea Times reported last month that the government may be allowing them in future regulations. “The financial authorities have been talking to the country’s tax agency, justice ministry and other relevant government offices about a plan to allow ICOs in Korea when certain conditions are met,” the news outlet quoted an anonymous source.