The ICO ban in South Korea was a major hit to the crypto companies located in the country. From the moment of the ban, the government has been seeing some opposition from the companies as well as some members of the parliament. However, up until now this opposition mostly consisted of outcries on social media.
A local Blockchain company called Presto decided to kick it up a notch and bring the whole ICO ban topic to the court. In their announcements, the company depicts the ICO ban as unconstitutional and vows that it will fight in the courtroom to have it lifted.
Kang Kyung-won, who is the CEO of Presto has commented that the private companies will most likely be the ones to spearhead this protest, as the opposition within the parliament is definitely not enough to sway the major decision makers. Mr, Kang also said that the ban doesn’t make any sense as the security of crypto customers is arguably the highest with South Korean based companies.
Was there another option?
The South Korean government could be understood from a certain standpoint. Some ICOs tend to fail to reach their goals or turn out to be outright scams. It was the government’s intention to stop these ICO scams in their wake, but honestly, there could have been a better way to do it.
An ICO is when a crypto company sells its tokens in order to gather some capital to start developing it. You can probably see how hard it must have been for newly formed crypto companies to develop their business without a proper capital, therefore making investments with them even riskier than it would have been with an ICO.
A tightening of the regulations on ICOs could have been a solution the South Korean government could have come up with. But the process of heavily regulating ICOs takes time, effort and money, therefore they saw it more feasible to completely restrict the action. Normally it would have just taken some proof of a realistic and functioning 10-year business plan and a comprehensible whitepaper.
Hit them where it hurts most
The ban was officially introduced in September 2017. Some companies didn’t see too much of a problem in this new regulation as the crypto market was “relatively stable”. But we all know the 4th quarter of 2017 and how it made most of the cryptos explode in price, especially the biggest one, Bitcoin, which almost reached $20,000 at some point.
The authorities haven’t left the companies in the dark and guessing, however. The Vice Head of South Korea’s Financial watchdog announced that the primary reason was to protect the crypto market, as the investors were becoming way too bullish. You can’t really argue with that, almost everybody was interested in buying and holding.
However, these intentions didn’t really spark that compassion with the companies as they still view the ban as unconstitutional, especially in the wake of the tax that the South Korean government is planning for cryptos. And it’s hard to disagree with the outcries of these companies as well. Would you have liked it if you were left out while your friends were all getting rich?
What does Presto do?
This South Korean company turned out to be quite the idol for some minor crypto firms. Their main product is to support other crypto companies, help them develop their own tokens and then features them on its decentralized crypto exchange.
This “business model” was made with the ICO mishandling and scamming companies in mind. Thanks to the contract called DAICO (Decentralized Autonomous Initial Coin Offering) it would have been a lot easier to deal with unprepared ICO enthusiastic companies and outright scams as well, as Presto would just disregard them and refuse the support.
After all this time?
WE’ve all head enough for the bearish market already. Thankfully winter is here and it’s hibernation time. There is still hope that the market will swing around and investors will return to their bullish sentiment. As for the court procedure, not much hope is on the horizon as the government stays firm on their decision. There are still details to be adjusted. Like who will represent who and what the main topic will be about.