South Korea has issued guidelines that specify the categories of digital assets that will be treated as securities in the nation and subject to the country’s securities regulations.
The Financial Services Commission (FSC) noted in a press statement that digital assets that fulfil the criteria provided forth in the country’s Capital Markets Legislation would be recognised as securities. These qualities may be found in the act itself.
According to the legislation, securities are considered to be forms of investments in the financial market in which the purchaser does not need to make any extra payments after the first investment. In addition, the FSC presented several examples of the kind of digital assets that are most likely going to be categorised as securities. According to the Financial Stability Commission (FSC), this may include tokens that offer investors with a return, grant holders rights to dividends or residual assets, or give holders a stake in the operations of the firm.
Under the provisions of the country’s Capital Markets Law, virtual currencies that meet the criteria for classification as securities tokens will be subject to regulation. In the meanwhile, new rules will control digital assets that do not have the characteristics of securities and will apply to such digital assets.
Token issuers and brokers, such as cryptocurrency exchanges, will be responsible for determining whether cryptocurrencies will be categorised as securities based on the legislation, as stated by the FSC. Additionally, the regulatory body emphasised that a case-by-case analysis will be performed.
The financial authority also underlined that the new guideline is part of preparations for the legalisation, issuance, and distribution of security tokens inside the nation. This was mentioned in the previous sentence.
The cryptocurrency ecosystem has seen significant participation from South Korea. The city of Busan announced its intentions to create a decentralised digital commodities market on January 19th. Officials from the government have said that this year would mark the beginning of the platform’s activities.
In addition to this, the Ministry of Justice of the nation has plans to implement a monitoring system for cryptocurrency. The government of South Korea announced on the 29th of January that it will implement a monitoring system in an attempt to prevent efforts to launder money and to reclaim cash that are tied to illegal activity.