Crypto firms in South Korea have been mandated to self-regulate under South Korea’s new guidelines on crypto and security tokens.
South Korea’s new guidelines on crypto regulation are expected to provide further clarity for crypto firms. The crypto companies would get details on how security tokens would be interpreted under these new guidelines.
Only tokens digitized using distributed ledger technology would come under the ambit of security tokens, which the country’s Financial Services Commission clarified. Under South Korea’s new guidelines, crypto firms will be responsible for regulating themselves.
Senior Policy Adviser at a blockchain firm, Angela Ang, said: “South Korea’s approach of tying the scope of security token offerings back to the definition of securities is broadly aligned with other regulators such as Singapore and Hong Kong.” She further stated South Korea’s new guideline should promote adoption and innovation in the crypto industry of South Korea.
Crypto firms have welcomed the move, as most needed clarification on how security tokens would be defined in South Korea. Traditional financial institutions have responded positively to South Korea’s new guidelines and have also planned to demonstrate the best practices of trading securities in collaboration with others.
Legislators will then modify important current legislation to include security tokens. In the first part of this year, the National Assembly will be presented with amendments to the Capital Markets Act and the Electronic Securities Act. However, by self-regulating, crypto firms in the country will take the first step. South Korea’s new guidelines mandate that token issuers, brokers, and other interested parties evaluate whether or not a token is a security.
The process of getting licenses, which might take one to two years, depending on the licenses and the business model of the organization, will be required of crypto firms without securities-related licenses.