News

South Korea Issues Guidelines Defining Security Tokens

Key Points:

  • South Korea announced guidelines outlining which specific cryptocurrencies will be subject to the same rules as financial instruments.
  • Digital assets that offer a stake in business operations, dividend rights, or a cut of corporate earnings are likely to satisfy the criterion.
  • The action is a component of the continuous evaluation of digital assets and the creation of thorough laws for the industry.
The Financial Services Commission (FSC) of South Korea announced guidelines on Monday outlining which blockchain-based versions of conventional securities, referred to as security tokens, will be subject to the nation’s capital markets regulations.

According to the FSC, blockchain-based tokens will be considered and governed as securities provided they meet the criteria outlined in the nation’s Capital Markets Act.

According to the Capital Markets Act, securities are financial investment products that do not require investors to make extra payments above and beyond their initial investment.

The FSC stated examples of digital assets that are probably going to be categorized as securities include those that provide investors a stake in how a firm is run, the right to dividends or residual property, or the ability to have the issuer assign corporate earnings to the investors.

Cryptocurrencies and other digital assets that resemble securities will be managed by the Capital Markets Law, whilst those that don’t fall within that category will be subject to laws for digital assets that are presently being developed.

The guideline makes it clear that stablecoins, a type of cryptocurrency used for payments and as a means of exchange that is tied to the value of other currencies like the U.S. dollar, would probably not be included in the definition of securities. Security tokens are also likely to exclude digital assets that have no issuer and do not have to meet the duties consistent with the investor’s rights.

In the coming months, South Korea is anticipated to release new crypto regulations, making it the most recent nation to implement a regulatory framework in response to the failure of well-known operators, including the nation’s own Terraform Labs, the organization responsible for the Terra blockchain, last year.

The country is also seeking to fully regulate the cryptocurrency and blockchain industries, with the National Assembly’s members now debating 17 different legislation frameworks pertaining to the industry. The negotiations are intended to produce the Digital Asset Basic Act (DABA), a comprehensive legislative framework for policing Korea’s burgeoning cryptocurrency market.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join us to keep track of news: https://linktr.ee/coincu

Website: coincu.com

Harold

Coincu News

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.

Recent Posts

Best Cryptos to Invest in December 2024: Qubetics Surges Past $2.6M as Solana Records Big Whale Pump and Polkadot Aims for $6

Best Cryptos to Invest in December 2024: Qubetics surges past $2.6M, Solana’s whale pump ignites…

34 minutes ago

Bitcoin Trader Turned $100M in His 20s—Now Reveals 5 Altcoins to Build a $50M Portfolio, With Memecoins Leading the Way!

As Bitcoin reaches unprecedented heights and the market surges, he's highlighting five altcoins poised for…

2 hours ago

Which Crypto Will Explode in the 2024-2025 Bull Run?

With the crypto market reaching new peaks, many are eager to discover digital currencies poised…

2 hours ago

Dogecoin and Shiba Inu Approach $1, but All Eyes Are on XYZVerse’s Push to $10!

XYZVerse, blending sports passion with meme energy, is set to make a significant impact, uniting…

2 hours ago

Will Bitcoin Crash or Soar Past $105K in 2024?

Will Bitcoin Crash?" seems to be one of the most controversial questions, as the price…

4 hours ago

The Best Crypto for Passive Income? 10% Weekly Gains and 20% Final Surge—Qubetics Mirrors Cosmos’ Early Success!

There’s always that one coin people wish they hadn’t overlooked. For many, Cosmos ($ATOM) is…

4 hours ago

This website uses cookies.