South Korea to treat crypto tokens as securities • The Register

South Korea’s Monetary Providers Fee yesterday revealed plans to control crypto property as if they’re securities.

An announcement from the Fee’s Capital Market Division argues that traders ought to count on that tokenised property get pleasure from the identical safety as standard securities, as a result of they meet the identical definitions South Korea applies to different securities.

The doc additionally notes that there are various kinds of securities traded in South Korea with out the involvement of establishments or exchanges, similar to shares in personal corporations. The regulator due to this fact doesn’t imagine that defining crypto tokens as securities creates a brand new class of securities.

Or because the machine translation of the doc places it: “The meals doesn’t change it doesn’t matter what container it’s served in.”

The Fee extends that metaphor by noting “You can not use something as a container for meals” and “Appropriate bowls might fluctuate relying on the kind of meals.”

Tokenized property, the regulator argues, are a brand new type of container appropriate for a brand new class of safety.

The doc additionally means that the identical blockchain tech powering tokenised property might be used to create new containers that “enhance the issuance and transaction of present securities extra effectively and conveniently”.

Curiously, the doc seems to not point out using blockchain based mostly property as forex. It does, nonetheless, envisage some self-regulation with exchanges requested to resolve when tokens they commerce are securities and when that remedy isn’t wanted.

The regulator has additionally identified that South Korea’s legal guidelines, and the opinions expressed on this doc, apply to tokenised property issued and created abroad.

The regulator intends to submit amendments to related South Korean statutes later in 2023, within the hope the nation’s legislature makes them regulation.

The Fee could be very eager for that to occur, because the doc makes quite a few references to the arguments it makes defending traders from violations of the regulation.

The necessity for such safety isn’t onerous to search out in South Korea, as a number of native crypto outfits have ignored laws with deeply disagreeable outcomes. And naturally the nation is house to Do Kwon, whose Singapore-based Terraform Labs imploded in 2022, making CEO Kwon cryptoland’s largest villain till the title was snatched away by FTX’s Sam Bankman-Fried. ®