It looks like South Korea has cleared up the murky waters of security tokens: they can now operate safely and securely in the country, thanks to the Financial Services Commission’s confirmation that security tokens are indeed tokens that are digitized using distributed ledger technology.
Shinhan Investment and Securities, one of the country’s largest securities companies, is inviting other companies to join a friendly alliance to inform investors of the advantages of token securities. This alliance will set standards and best practices for issuing and trading, offering an opportunity for players in traditional finance who already hold securities licenses to respond.
There’s no denying the high potential for abuse in the nascent crypto economy, so having a secure, regulated system that adheres to best practices is of great importance. As the sad case of Wemade showed last year where they were falsely disclosing the number of Wemix tokens they issued, leaving investors out of pocket and risking their reputation!
Breaking News: Crypto firms in South Korea must take responsibility for their own self-regulation, following new guidelines! Stay informed with the latest crypto news – follow us for updates. #Crypto #SouthKorea #Regulation #CryptoFirms
— Byte Syze Crypto (@bytesyzecrypto) February 15, 2023
New Regulatory Framework on the Horizon!
South Korea has been drafting a new regulatory framework for the industry. The goal is to create a safe and secure environment for everyone involved, and that’s why the government is now proposing amendments to the Capital Markets Act and Electronic Securities Act, due to be put forward to the National Assembly in the first half of 2023. What this means is that companies in the crypto space will need to go through a classification process to assess their tokens, and then determine whether they need to register as securities and obtain a securities license.
Companies without security licenses will need to apply for the relevant permits, and this should usually take from 1 to 2 years depending on the license required and the nature of the business. Having said that, this process isn’t overly complicated, so don’t worry. While this sounds daunting, it’s actually important to help protect users and investors in the crypto space. Moreover, it will help companies establish credibility within the industry for their services, ensuring the legitimacy of their operations.