South Korea has added a layer of regulations on the crypto sector. On Monday, February 6, the nation announced that all blockchain-based tokens operating in its jurisdiction would be treated under the “securities” asset category. Investment vehicles that do not incur additional fees, such as maintenance fees, other than the original investment are treated as “securities” in South Korea. The Asian nation has recently ramped up efforts to regulate the crypto sector to keep up with next-gen fintech technologies.
The Financial Services Commission (FSC) of South Korea has stated that the security-like tokens associated with a cryptocurrency will be determined on a case-by-case basis. The ratings are reported to the FSC by crypto exchangesBrokers and issuers of crypto tokens.
These digital assets, which typically serve as stakes in companies or have issuers that attribute profits generated by the token to investors, can be treated as securities in South Korea.
A learn of the FSC had stated that the crypto market in South Korea had reached the valuation of US$46 billion (approximately Rs.3.66.3 billion) by the end of 2021, with the number of users approaching 5.58 million, or about 10 percent of the des Country reached population.
South Korea’s government is said to be working on drafting detailed rules to ensure investors in the sector are protected from financial risks and that the crypto assets are not misused for illegal purposes. These new crypto token classification guidelines were announced to prepare the South Korean financial sector for what is to come Crypto Rules.
Tokens that are not classified as securities will be subject to the new laws, which are expected to be announced soon. South Korea aims to allow companies to directly issue security tokens for an over-the-counter market to keep their use simple and widespread under government oversight.
The nation’s Department of Justice is allegedly Building the “Virtual Currency Tracking System” to prevent cases of money laundering via crypto.
Cryptocurrency is an unregulated digital currency, not legal tender and is subject to market risks. The information provided in this article is not intended to and does not constitute financial advice, trading advice or any other advice or recommendation of any kind offered or endorsed by NDTV. NDTV is not responsible for any loss arising from any investment made based on an accepted recommendation, forecast or other information contained in this article.
