South Korea has published guidelines on the issuance of cryptocurrencies as securities tokens.
Ahead of crypto legalization and an ongoing review of digital assets in the East Asian country, South Korea’s Financial Services Commission (FSC) confirmed that blockchain-based tokens will be treated as regulated securities under the condition they have “corresponding characteristics” in the country’s Capital Markets Act (CMA).
Under the CMA, securities are defined as financial investment instruments. Such instruments do not require investors to make additional payments on top of any original investment made.
Digital assets classified as securities by the FSC include those that either provide a stake in the operation of a business, hold the rights to dividends or residual property, or have the issuer contribute profits generated from the business to the investors.
The FSC also stated that the decision on whether a security holds the characteristics of a cryptocurrency or other digital assets will be determined on a case-by-case basis.
Crypto exchanges, brokers and issuers will be held responsible for making the final evaluation in line with specific regulations.
Only cryptocurrencies or digital assets with the characteristics of a security will be regulated under the capital markets law, while regulations for digital assets will govern those outside of those characteristics.
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