Korea’s Financial Supervisory Institute Plans to Formulate Domestic Securities Token Laws

02/14/2023 02:30 • Blockchain Briefs • 86 views

On February 14, according to the source, the Digital Assets Research Group of the Korea Financial Supervisory Institute is focusing on the overseas cases related to virtual assets, including carefully referring to the lawsuit between XRP and the United States Securities and Exchange Commission (SEC), which is expected to reach the results as early as March, to formulate the relevant provisions of the domestic securities token (ST0) in South Korea.

The South Korean authorities are studying the case of SEC v. XRP in the United States and other cases to refer to the relevant provisions of ST0

Analysis based on this information:

The Digital Assets Research Group of Korea’s Financial Supervisory Institute has turned its attention to overseas cases involving virtual assets. The group is currently reviewing the ongoing lawsuit between Ripple Labs, the creator of XRP, and the United States Securities and Exchange Commission (SEC). The lawsuit against Ripple Labs, filed by the SEC, alleges that the company has breached securities laws by selling XRP tokens as unregistered securities. The case is expected to conclude by March this year.

The Korea Financial Supervisory Institute is using this case to formulate provisions on domestic securities tokens (STO). These provisions are being put in place to ensure the legitimacy and legality of STOs in South Korea’s financial markets. STOs are digital securities that are backed by assets like stocks, real estate or bonds.

South Korea has been stepping up its regulation efforts on the cryptocurrency industry in recent months. The country’s government wants to ensure that the activities of cryptocurrency exchanges and other market participants comply with existing financial rules. This has been set in motion with announcements from the Korean government in 2020 that it would tax cryptocurrency gains like any other income, and that crypto exchanges would be required to comply with anti-money laundering (AML) rules.

The move to develop domestic securities token provisions is another step towards greater regulation in the cryptocurrency industry in South Korea. The provisions are expected to enhance the transparency and security of STO-related transactions in financial markets, keeping them in line with existing securities laws.

This can be seen as a positive development for South Korea’s cryptocurrency industry, as it allows for greater regulatory clarity and legal legitimacy, making it a more attractive market for investors. The formulation of domestic securities token provisions in South Korea may also serve as a model for other financial regulators seeking to regulate the cryptocurrency industry.

In summary, South Korea’s Financial Supervisory Institute is looking to foreign cases in virtual assets, such as the XRP lawsuit, to develop domestic securities token (STO) provisions. With the country’s increased focus on regulating cryptocurrency activities, these provisions can bring greater transparency and security to STO-related transactions.

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