South Korea Issues Guidelines for Regulating Security Tokens as Legislation Looms

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South Korea's financial watchdog has issued guidelines on how security tokens would be regulated in the country under upcoming legislation. iamsandali reports

using distributed ledger technology, according to the guidance, and will apply only to digital assets that qualify. The guidance clarifies that stablecoins, which are crypto pegged to the value of other currencies such as the U.S. dollar and are used for payments or as a medium of exchange, will likely not fall under the definition of securities.

"On the other hand, digital assets corresponding to securities must be issued and distributed in compliance with all securities regulations under the Capital Markets Act," the FSC said. The planned rules are aimed at supporting innovation while ensuring consumer protection, according to the guidelines.

"During the first half of 2023, we will promote institutionalization by submitting amendments to the Electronic Securities Act and Capital Markets Act to the National Assembly," the FSC said.

 

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