South Korea’s ICOs move to Singapore, ban 'doesn't make much sense'

25 Jun, 2018
by Becky Tsoi
South Korea’s ICOs move to Singapore, ban 'doesn't make much sense'

South Korean government’s attitude towards a total ban on ICOs announced in September last year is being criticized. Without a clear implementation plan of the ban and an announcement of laws related to the policies, many South Korean companies are still threatened to establish their subsidiaries in other countries to make an ICO.

According to Business Korea, a CEO of the company with a subsidiary that has completed an ICO in Singapore said, ‘It takes at least 200 million won to 300 million won ($179,775 to $269,663) to launch a subsidiary in Singapore and receive consulting services. We also need to pay taxes according to the Singapore’s laws when we convert the virtual money raised with an ICO into real money in order to begin a business.’ He added that it was a shame that he had to spend hundreds of millions of won in Singapore, not in South Korea.

‘When I talked to foreign companies, they did not understand why South Korean companies were trying to make an ICO in other countries instead of South Korea. Foreign firms come to South Korea to meet South Korean investors but South Korean companies are trying to attract investors in other countries,’ said another CEO seeking for law firms and consulting service providers in Singapore to launch an ICO.

The mismatch of funds-seeking firms and investors resulted from the latency of policy establishment on ICO offerings in South Korea. Pressure has been added on the South Korean government to come up with a policy on initial coin offerings (ICOs). 

Moving ICOs from South Korea to Singapore involves risk that companies often underestimate. An executive of a Singapore consulting services provider to South Korean companies said, 'There are a lot of companies that are seeking to make an ICO in Singapore but most of them come to Singapore without knowing Singapore’s ICO regulations. So, I am concerned that there might be problems, like taxes, later. If the South Korean government presents a clear standard, they wouldn’t come to Singapore and take risks to do a business.'

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