In September 2017, South Korea – one of the world’s most crypto-friendly nations – took a not-so-friendly decision; to all Korean ICOs. A bout of panic selling broke out, with multiple blockchain startups in Korea fearing the worst. However in 2018, native cryptocurrency companies have found a way that keeps investors, and the government, happy.
If you have been in the cryptosphere long enough, chances are you have heard of, or even invested, in (ICX). Dubbed the “,” Icon’s blockchain aims at building a unified platform for ICOs to launch on, alongside offering its ICX token that facilitates fast payments.
But after South Korea’s ban threatened to take the ‘Korean’ out of Icon, the company made a simple yet effective move; register and issue tokens in Switzerland while operating as a business in Seoul.
For this reason, the token is now allowed to trade on South Korea’s leading cryptocurrency exchanges, such as and .
to Park Nok-sun, an analyst at Nh Investments, “Icon’s listing in local exchanges is significant in itself as the coin is South Korea’s first platform.”
Another Seoul investor, Choi Il-kyu, appreciated the development:
“The cryptocurrency market’s future seemed unclear as the market has constantly been declining for the past few months. Such disappointment made me think maybe I should stop investing, and that’s when I found Icon.”
At the time of writing, ICX trades at $3.51 according to data from .
South Korea’s Mixed Stance On Crypto
Although apprehensive about ICOs, the South Korean government has been about cryptocurrency trading and exchanges, with all crackdowns usually due to either fraudulent activities or lack of KYC/AML procedures.
The co-chief of Korea’s Blockchain Association, Kim Haw-joon, believes that “foreign” tokens might be the only way for local exchanges to list Korean-grown cryptocurrency businesses. Firms share the sentiment. In 2017 and 2018, more than ten companies – backed by Korean investors – have issued their tokens in foreign countries.
Korean multinational groups are not shying away from cryptocurrencies either. In April 2017, Hyundai Group-backed was launched in Switzerland. The offering “allows fast, secure and effective communication between IoT devices.”
Another one is Gibraltar-based that has partnered with multiple government hospitals in South Korea. The company collates medical information from its various partners, ensuring the patient’s health records – from his lifetime – are readily available when required. The data streams can be accessed and paid for via the company’s MED token. Currently trading at on BiBox, the firm raised $21 million via an .
Government Asks To Report Foreign Issuances
Meanwhile, South Korea’s passed a circular that made it necessary for companies to report any overseas token issuances. They also made clear that action on trading activities in the country will not be taken.
However, Medibloc’s CEO, Lee Eun-sol, says businesses who choose the overseas route will learn some things the hard way, “We have to establish an overseas branch, hire workers there, spend a huge amount of money for all the paperwork needed, and often have to fly there to take care of things, making it just so inconvenient.”
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In a major development, Bithumb – one of South Korea’s largest cryptocurrency exchanges – announced its plans to issue a native digital token called Bithumb Coin later in 2018.
Bithumb’s ICO Aspirations
A local subsidiary is developing the token, according to a person with close knowledge of the matter. However, the subsidiary’s details remain unknown.
According to , the token aims to attract institutional investors. However, it remains uncertain as to how much of the tokens are allocated to “private sales” – which are reserved for investors who invest large amounts of money.
A lack of detailed information regarding the ICO is attributed to legalities associated with Bithumb’s ownership. The company is wholly owned by , which is required by law to publicly present all company (and its related subsidiary’s) information, data, and earnings. Hence, Bithumb’s ICO becomes complicated to be clearly displayed in an annual company report, and until these intricacies are ironed out, the company is abided by law not to release any details.
After the ban on the contentious fundraising technique of ICOs in during 2017, Bithumb can not issue tokens in their homeland. Hence, the company would follow the lead of Korean platform token (ICX), which its tokens in Switzerland to avoid complications. Reportedly, Bithumb is considering to establish its ICO.
Exchange Tokens The Latest Norm
Exchange-issued tokens are specific digital assets that are used as alternate currency trading pairs apart from the usual BTC, ETH, and USD. Also, they allow users to pay lower exchange fees.
Bithumb joins an increasing list of exchanges that are raising funds via an ICO, by offering their own tokens. In January 2018, Chinese crypto exchange developed and delivered an aptly named Huobi Token (), with supply limited to 500 million. However, there was no ICO for the HT – which trades at $2.07 at the time of writing – and it is offered only registered Huobi users.
The world’s largest cryptocurrency exchange by volume, Binance, also has its own digital currency – the . Alongside discounted fees, Binance conducts a quarterly ‘coin burn.’ The burn cuts down total coin supply by several notches, in turn increasing the coin’s value.
As explained in Binance’s , the company would use 20 percent of their quarterly earnings to buy back BNB and “burn” them, until 50 percent of all the BNB, i.e., 100 million BNBs, are brought back. Every buyback is logged on the Ethereum blockchain, as BNB is an ERC20 token.
Another cryptocurrency exchange, , offers its native (KCS); apart from low fees, the token pays a part of the company’s profits to the exchange’s users.
To read BTCManager’s review of exchange coins for 2018, click .
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