South Korea has issued guidelines that specify which types of digital assets would be classified and regulated as securities in the country. The Financial Services Commission (FSC) stated in a press release that digital assets that meet the criteria outlined in the Capital Markets Act would be considered securities.
This law regards securities to be financial investments for which investors are not compelled to make any further payments. The FSC also presented examples of digital assets that will likely be categorized as securities. According to the FSC, this might include tokens that provide investors with a stake in business operations, entitlements to dividends or residual assets, or profits earned by the business.
Preparations for the Legalization of Security Tokens
The country’s Capital Markets Law will govern cryptocurrencies that match the characteristics of security tokens. Other forthcoming regulations will govern digital assets that do not possess the features of securities. According to the FSC, token issuers and brokers such as cryptocurrency exchanges will be responsible for determining which cryptocurrencies will be categorized as securities depending on applicable regulations.
In addition, the regulator emphasized that the assessment will be case-by-case. The financial authority added that the new guidelines are part of the preparations for the authorization of the issuance and distribution of security tokens in the country. South Korea has been an active participant in the crypto sphere, with a number of sectors in the country experiencing ongoing growth.
The city of Busan announced plans to launch a decentralized digital commodities exchange on January 19. The platform will begin operations this year, according to government authorities. In addition, the country’s Ministry of Justice aims to implement a tracking system for cryptocurrencies. The South Korean government said on January 29 that it will implement a tracking system to prevent money laundering and reclaim funds associated with illicit activity.
