ICO(Initial Coin Offering)에 대한 주요 이슈 및 시사점

Abstract

Following the rise of cryptocurrency and several successful initial coin offerings (“ICO”), the number of ICOs has increased dramatically as a prominent means of fund raising all around the world. Korea, however, has run counter to such trend with the government’s prohibition on ICOs. The ICO regulation of Korea must be reassessed considering both the financing potential of ICOs and the need for investor protection. Under the current laws, the Financial Investment Services and Capital Markets Act of Korea (the “FSCMA”) that regulates issuance of securities may be applicable to ICOs. The applicability of such securities regulations depends on whether a token, by its individual nature, is considered a security. Whether such token would be deemed an investment contract, debt or equity security must also be analyzed. If a token has characteristics that could be viewed as prepaid electronic payment means or electronic currency, such ICO would be subject to the Electronic Financial Transaction Act. However, if such token is issued by a distributed ledger on the blockchain and thus the issuer is difficult to identify, it is unlikely that the token would fall under the Electronic Financial Transaction Act. On the other note, certain marketing strategies of an ICO could trigger the Fund-Raising Business Act and/or Door-to-Door Sales Act. Despite some existing laws that may be applicable to ICOs, there is a need to adopt a new law or regulation specific to ICOs to get rid of any regulatory gap. The ICO regulations of Switzerland and Japan can be referred to as examples. Switzerland has adopted a new ICO standard based on the guidelines of its financial supervisory authorities. For Japan, under its new amended law related to cryptocurrency, cryptocurrency is broadly defined to include most of tokens that ICOs are regulated in detail. In Korea, the current legal system needs to be thoroughly reviewed first to identify the types of tokens that are outside the regulatory scope. Until a new law or regulation is enacted to cover all types of tokens, the regulatory authorities could consider issuing guidelines for appropriate procedures and requirements for ICOs. Categorizing ICOs by different types of investors or offerings (i.e., public or private) and applying individualized regulations could be considered. In the long term, enactment of a legislation that sets forth cumulative rules for ICOs like in Japan would be advisable.