Government moves to re-allow domestic ICOs… allowing corporations that meet certain requirements and mandating advance submission of white papers

The government is pushing a policy shift toward allowing domestic coin offerings (ICOs) again.

According to financial authorities and industry sources on the 27th, regulators are reviewing a plan to permit domestic ICOs only for corporations above a certain size. Issuers would be required to submit project information such as a white paper to financial authorities in advance of issuance, and the framework is expected to include a structure that allows investors to review the materials.

Under the proposal being actively discussed, the Financial Services Commission would receive the filing, while the Financial Supervisory Service would handle substantive screening and oversight. Regulators, however, are making it clear that the process is not intended to function as a permit or approval for issuance, but is closer to a “disclosure” mechanism aimed at providing information to investors.

Given that it is difficult to fully verify a project’s substance in advance, financial authorities are also considering measures to hold the issuing corporation fully accountable should problems arise later.

Domestic ICOs have been subject to a blanket ban since 2017, and if the plan is implemented, it could spur a “reshoring” trend among Korean projects that have been issuing coins overseas. The measures are set to be included in the Digital Asset Framework Act (the second phase of virtual-asset legislation).