South Korea Financial Services Commission has announced to broaden the definition of tokens based on blockchain technology will be termed security, keeping in the loop the implications for crypto exchanges and issuers.

On Monday, the Financial Services Commission informed that blockchain-based tokens having characteristics similar to securities as explained by the Capital Market Act of South Korea would be regulated as securities.

According to South Korea’s Capital Market Act, Digital assets that will meet the characteristics of securities should give dividend rights,  a stake in business operations, and a share of profits, per the reports.

South Korea will soon share its new updated regulation regime in a few months this year. 

In the face of last year’s big collapse of South Korea’s own Terraform Labs, the parent company of Teera blockchain, South Korea will become the latest country to be pushing fast with its regulatory framework.

The Financial Services Commission also informed that whether to define a token as securities will be only evaluated by the service providers and crypto exchanges. 

The statement said that firms that don’t follow procedures for issuing securities would be violating the law and face sanctions.

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