South Korea Issues Guidelines for Regulating Security Tokens as Legislation Looms

South Korean officials have issued guidelines for regulating security tokens – digital tokens that can represent a security – as authorities continue to draft regulations for the sector.

According to a report by local news outlet The Korea Times on Tuesday, the guidelines were issued by the Financial Services Commission (FSC) and the Ministry of Justice. The guidelines include rules on taxation, money laundering and investor protection.

The guidelines come shortly after the South Korean government announced in late January that it would introduce a new set of regulations for the issuance of security tokens. The move was in response to the South Korean government’s desire to better protect investors and encourage innovation in the country’s nascent cryptocurrency and blockchain industry.

The new guidelines also come at a time when the South Korean government is in the process of preparing legislation for digital asset-related activities. The legislation, which is expected to be introduced later this year, will set out clear regulations for the cryptocurrency and blockchain industry.

Under the new guidelines, companies that issue security tokens must meet certain requirements. These include having a sound corporate structure and financial conditions, as well as an experienced management team. Companies must also have a solid business plan and a transparent token issuance process.

The guidelines also state that companies must have an internal control system to prevent money laundering and must ensure the protection of investors’ rights. Companies must also comply with applicable laws and regulations, including those related to taxes and accounting.

Once the guidelines are implemented, the South Korean government will be better equipped to monitor and regulate the security token industry. This will help ensure that companies issuing security tokens are doing so in a safe and responsible manner.

Overall, the introduction of these guidelines is a positive sign for the cryptocurrency and blockchain industry in South Korea. The regulations will provide greater legal certainty, which will likely encourage investors to participate in the sector.

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