The blockchain startup, Presto, made a legal move in Korea’s Constitutional Court to repeal the government’s year old decision to outlaw all domestic initial coin offerings (ICO)s.
Presto CEO, KyungWon Kang says, “The government’s choice of an all-out ban rather than a regulation that classifies virtual money by itself has not met the minimum level of encroachment, and compared to other ICT industries such as crowdfunding, the level of ICO regulation has infringed on equality,”
KyungWon Kang, the CEO of Presto, said on Thursday that it filed a petition with the Constitutional Court saying that the government’s measure that bans all forms of ICOs violates the rule of law.
The lawyer working in sync with Presto’s initiative, JooWon Park, is the secretary of the Korean Bar Association Blockchain and attorney within the group’s Blockchain Task Force (TF). The legal consortium of more than 50 lawyers mission is to help design the legal infrastructure that is currently lacking in Korea.
The world saw an ICO hype earlier this year. Startups and existing businesses wanted to jump in on the blockchain craze. Non-accredited investors now had a simple means to invest in startups under ICOs. The new and appealing method of fundraising caught the Korean government’s ire for its token volatility, overheated speculative investing, and high rates of scams that risked doing financial harm to the vast public if left unchecked. To shield the Korean public the government held a joint task force meeting on September 29th of 2017 to ban all forms of ICOs in Korea.
Presto and the Korean Bar Association Blockchain Task Force believe that the aged ban is hindering development. The ban is more than a year old, and it’s proving to be a barricade against proper laws and guidelines according the TF. The ban was viewed by many as a band-aid, until following laws were developed. However, the proclaimed ‘plans to overhaul the law and system’ is stagnating.
Presto argues that the government is violating the principle of rule of law because there is no legal basis for the continuation of the ban. The legal stance the blockchain company is taking is that the government is ignoring alternative measures such as the application of the Capital Market Act. Moreover, that the government is overstepping its bounds by infringing on the right of scientific technology under Article 222 of the Korean Constitution.
“Although we considered conducting the project through indirect methods such as overseas corporations, we have been preparing for business and development in Korea, following the government’s belief that we will foster the new industry through follow-up measures,” said KyungWon Kang
Currently, Korean startups or existing businesses that want to hold ICOs still do. They establish shell companies in ICO friendly countries while operating in Korea, an open secret that is widely done in the blockchain world. However, companies like Presto have a desire to run ICOs and remain domestic feel sidelined by the government’s neglect.
CEO Kang ends with, “In the world of science and technology, one or two years is as important as 100 years of the industrial revolution. We should no longer make fun of the international community and bring poverty to science and technology with policies like the ICO ban.”
