“To avoid being treated as a fraud or a dine and dash, protective device for investors is needed”
Blockchain is rapidly getting its own way was a foundation of the fourth industrial revolution and a core technology of cryptocurrency. It is still controversial about the investment on cryptocurrency that it can be considered as a dine and dash, but those people are acknowledging the infinite possibility of blockchain technology.
Government is in the same stance, in several minds about the regulation of cryptocurrency, but actively supporting the promotion of blockchain industry. Government is planning to invest 10 billion Korean Won in the blockchain technology development, and 4.2 billion Korean Won in construction business based on blockchain utilization. Planning to establish a blockchain industrial development general planning in the first half-year, so the blockchain can be a base technology of the fourth industrial revolution.
However, there is a long road ahead. The blockchain technology is applied to whole industry making diverse blockchain-based business model, but the government is causing confusion since a regulation on the blockchain is not prepared yet. Also giving an indication of collision with existing regulations.
So, how do the experts are looking at the current situation? The B chai is going to meet various blockchain experts from all over the world and figure out the current status of the blockchain and will explore the direction of future development.
Is it possible to have an Initial Coin Opening (ICO) in Korea? Though a lot of people thought it is not possible, it is actually possible. The government said to ban ICO on last year’s September. However, no follow up action was taken.
Nevertheless, it is not easy to find ICO companies in Korea. Though there is no legal problem, however, it can be disadvantageous to the company if the government doesn’t like it. Most of the domestic blockchain companies who are preparing ICO, are working with overseas projects such as Singapore and Switzerland.
There is a blockchain company who are taking challenge even in this risky situation. Though it has a corporation in Singapore, Berith Korea is the one who is doing crowd sale in Korea. I met Jung Hyuk Kim, the vice president of Berith Korea, and talked about the background and future plans.
Wasting time, money and effort in establishing overseas corporation
First, I asked why they are doing ICO in Korea. The vice president replied as, “Isn’t it normal to process ICO in Korea if we want to do business in Korea?” It will be rather strange to launch ICO in other country for a business in Korea.
Despite of some worries, the ICO is proceeding smoothly. “The ICO achievement rate is 76% as of 23rd of this month,” he said. He also added, ‘there is no big difficulty because the government’s perception has been changing.” Berith Korea aims to issue 1.3 billion Berith coins through ICO, which equals to 210billion KRW if calculated by the real-life price of Ethereum. Pre-sale is completed from 26~30 of March and the crowd sale is going on from 11~27 of this month.
Obviously, Berith Korea is not prepared for the government’s ICO ban. After establishing Berith Foundation in Singapore, he established Berith Korea as a subsidiary company in Korea. “It is a waste which we somehow regret.” Said by vice president Kim. “We had to set up a corporation in Singapore, so we had to spend unnecessary time, effort, and money,” he said. “It is a bit of a regret because the government has not set a clear guideline for ICO.”
A powerful post-regulation rather than pre-regulation can be an “ANSWER”
So, what is vice president Kim’s desired ICO guidelines or the government’s cryptocurrency policy? At present, he is also a member of the Korean Block Chain Association’s Advisory Committee.
Mr. Kim said “It is basically the fourth industrial revolution era. In this era of digital finance, there shouldn’t be any regulation.” He also added “Even if you don’t do anything, the value of the crypto currency will go to its own place and will be developed naturally like bubbles.”
He stated, “Right now the government should not be regulating but clarifying the legal status of cryptocurrency.” He also added “Accordingly, it is important to apply appropriate criteria such as security review, imposing VAT and income tax on investors etc.”
However, he emphasized on the necessity of strong punishment in case of any unwanted incident. Mr. Kim also said, “Rather than pre-regulation that hinders market development, it requires countermeasures to prevent side effects and a dedicated public servant to take care of that.” He also added, “In addition, if any kind of occurrence happens, strong post-regulation punishment is required.”
In that sence, Mr. Kim thinks that the role of the Korea Block Chain Association is important. The Korea Block Chain Association has recently set up autonomous regulations for mainly Upbit, Bithumb, Coin One, and Korbit to review the main cryptocurrency and for new cryptocurrencies, the committee decided to disclose basic information through the committee.
A solid business model must have technical implementation capability
I did not forget to advise the companies that are currently preparing ICOs. The vice president mr. Kim stated “The most important thing in preparing ICO is to protect investors.” And he emphasized on never to show disappointment, frustration or damage to the investors. He said “for that, first a strong business model should be framed.” He also said, “In addition, technical implementation capability, i.e. block-chain developers must be acquired.”
It was also said that the company should create an investor protection system by itself. Mr. Kim emphasized and said, “Many ICO companies are suspecting fraud, fakes, and doubts. If you do not want to hear these things, you should create your own investor protection.”
Meanwhile, Berith is a block-chain-based business platform that can be easily used in real business situations, from large enterprises to small and medium-sized enterprises and small business owners. Vice president mr. Kim has worked as head of e-banking at the Bank of Korea until last year. At present, he is the vice president of Berith, a member of Korea Block Chain Association Advisory Board. On top of that an adviser for the overseas remittance company called Fintech and EBS of Japan.