FSC to form commission for deciding whether NFTs are securities
Commission to also scrutinize security tokens and fractional ownership
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임준혁
임준혁 2022년 1월26일 16:02
금융위원회. 출처=한겨레
Source: The Hankyoreh

South Korea's Financial Services Commission (FSC) has announced that next month it will begin the process for determining whether or not NFTs, security tokens, and fractional shares can be considered 'securities' under FSC regulation.

Lee Yoon-su, head of the FSC's policy division for financial markets, announced on Jan. 25 that the FSC will formulate a commission for determining whether or not NFTs, security tokens, and fractional shares constitute securities that fall under FSC jurisdiction.

Lee made the announcement during a debate on "key issues and prospects for financial markets in 2022."

"The advent of technological innovations has given rise to numerous forms of digital investment, sparking the debate as to whether or not something can be considered a security," Lee said.

이윤수 금융위원회 자본시장정책관. 출처=자본시장연구원 유튜브 캡처
Lee Yoon-su, head of the FSC's policy division for financial markets. Source: Korea Capital Market Institute YouTube screenshot

Lee added that firms who issue and distribute such digital investment products have consistently claimed that their products are not securities.

"Thus far, they've been allowed to issue investment products without any form of license or oversight."

Lee said that an increasing number of investment products have been straddling the border between security and non-security, which has compelled regulators to formulate standards and definitions specific to digital assets.

South Korean law currently recognizes six categories of securities: debt securities, equity securities, fixed-income securities, investment contract securities, derivatives linked securities, and depository receipts.

NFTs are currently classified as digital collectibles.

As if providing insight into the FSC commission's potential verdict, Lee gave his personal opinion on NFTs.

If an NFT transaction is conducted between two individuals on a peer-to-peer basis, it can't be considered a security. However, if ownership of the NFT is fractionalized into shares with multiple investors, it takes on the character of a security.

"At that point, the technical nature of the NFT is irrelevant. What's relevant is the nature of the surrounding investment."

On this day, there was no clarification as to when the commission would make its final decision on NFTs. 

제보, 보도자료는 contact@coindeskkorea.com



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