Regulations For Security Tokens in South Korea To Be Prepared In 2022

The Financial Services Commission (FSC), the leading financial regulator in South Korea, released the report containing the research results of a joint policy conference held on September 6 with the Financial Supervisory Service, Korea Exchange, Korea Securities Depository, and Capital Market Research Institute. The participants gathered to talk about the distribution and issue of security tokens on a national level.

Creation of Separate Guidelines

The FSC determined that it was necessary to create separate guidelines to support the sound development of the market and industry because the nation's current capital market and electronic securities system do not contain legal terms for non-standardized securities issued via blockchain.

In the fourth quarter of 2022, the FSC will create and release the rules for security tokens. Then, the FSC will revise existing laws like the Electronic Securities Act and the Capital Market Act to construct the "Security Token Discipline System."

Korean Exchange To Run Market

The Korean Exchange will run the market for digital securities, and the Korean Securities Depository will evaluate the tokens before their registration and listing. The regulator will first permit small-scale over-the-counter trading.

The declaration is a new stage in a series of regulatory moves in the nation, whose recently elected government has set the goal of promoting the cryptocurrency industry. The Metaverse Industry Promotion Act, which would support the growth of the Metaverse in South Korea, was suggested for adoption by local lawmakers on September 1. According to an ambitious plan, a full global crypto framework was to be established by 2024.