• South Korean regulatory body, the Financial Services Commission (FSC), has released guidelines on how digital assets will be regulated as securities in the country.
• The regulations stipulate that all blockchain-based tokens will be treated and regulated as securities if they have characteristics that fit them into the country’s capital market act.
• The FSC has indicated that cryptocurrency and other digital assets’ security-like financial assets will be assessed on a case-by-case basis and that issuers and brokers must follow these rules.
South Korean Regulatory Body Releases Security Token Guidelines
The South Korean Financial Services Commission (FSC) has published rules outlining which digital assets will be regulated as securities in the country. All blockchain-based tokens are to be treated and regulated as securities provided they possess inherent characteristics that fit them into the country’s capital market act.
Cryptocurrency and Security-Like Financial Assets
The FSC has stated that cryptocurrency and other digital assets’ security-like financial assets will be evaluated on an individual basis, with issuers and brokers such as crypto exchanges held accountable for following these regulations.
Support for Innovations & Consumer Protection
These new guidelines support innovation while simultaneously protecting consumers from potential harm. The first half of 2023 is expected to see promotion and institutionalization through submitting the drafted guidelines for assessments.
South Korea’s Friendly Disposition to Crypto
South Korea has been one of the countries with extensive involvement in cryptcurrency ecosystems. Throughout 2018, it was reported that the government was investing 4 billion won towards developing a blockchain based virtual power plant, while during a national assembly policy discussion on ICOs in 2021, there was discussion of an internationally consistent crypto regulatory framework being needed. In addition, Busan announced plans to build a decentralized digital commodity market by Q4 2023, with products tokenized and traded via blockchain technology; while more recently, the Ministry of Justice announced plans to launch a ‘virtual currency tracking system’ for money laundering prevention purposes.
Conclusion
In conclusion, South Korea is taking steps towards regulating cryptocurrencies within its borders by releasing security token guidelines from its regulatory body – the Financial Services Commission (FSC). This is part of an ongoing effort from both governmental bodies along with private corporations within South Korea in order to ensure consumer protection while promoting innovation within cryptocurrency markets