Ahead of the proposed legalization of cryptocurrencies in Korea, the financial services commission (FSC) published rules on Jan. 6 that outline which digital assets will be regulated as securities in the country.
According to the FSC, assets that fall into this category of securities are assets used for staking to derive dividends. In contrast, assets like stablecoins that fall outside the above category will operate following the upcoming digital assets regulations.
The FSC stated that cryptocurrency and other digital assets’ security-like financial assets will be assessed on a case-by-case basis and that the issuers and brokers, such as crypto exchanges, will be held accountable for doing such evaluations in accordance with the rules.
Meanwhile, the new guidelines support innovation and simultaneously ensure consumer protection. The first half of 2023 will be more of promotions and institutionalization through submitting the drafted guidelines for assessments.
South Korea’s friendly disposition to crypto
South Korea has been one of the countries with robust engagements in the crypto ecosystems.
Recall that on Dec. 10, 2018, Yonhap, a local media outlet, reported that the South Korean government would be spending four billion Korean won to develop a blockchain-based virtual power plant.
On Sept. 20, 2022, the South Korean watchdog, during a national assembly policy discussion on ICOs, highlighted the need for an internationally consistent crypto regulatory framework.
Busan, South Korea, declared on Jan. 19, 2023, that it would build the world’s first decentralized digital commodity market by H2 2023, with all products tokenized and traded on the blockchain.
On Jan. 29, 2023, the Korea ministry of justice announced its plans to launch the ‘virtual currency tracking system’ to curb the menace of money laundering and recovery of crypto-related proceeds from crime.