Huobi Korea, a South Korean cryptocurrency exchange, held a meeting to discuss about STO (Security Token Offering). Opinion leaders and workers of relevant industries attended this meeting and discussed about direction of development of STO and future predictions.
STO is a procedure where investors issue and make security-type cryptocurrencies, which allow investors to own company shares and receive profits as well, public according to current Capital Market Act.
Elena Kang, who is the head of Huobi Korea’s Operations Headquarters, discussed about legal risks and predictions of STO at a panel discussion that took place in South Korea.
“One of the strengths of security-type tokens is that they enhance protection over investors as profits, voting rights, and shares become under investors’ possession.” said Elena Kang. “It is difficult to apply STO in South Korea at the moment as there is no clear stance from South Korean Government towards ICO and there is no clear regulation on cryptocurrency.” She emphasized that it is necessary to look into whether STO corresponds to a financial investment product under Capital Market Act before carrying out STO. She mentioned that although there is a possibility that security-type token can be categorized as an investment contract security under current laws, there can be legal risk with STO in South Korea due to unclear regulations.
She also talked about imperativeness on allowing STO as cryptocurrency market is forming a new ecosystem as it is transitioning towards security-type token. She predicted that there is a high chance that STO will develop fast in South Korea as guidelines on STO regulations are relatively clearer than other investment models.
Staff Reporter Gil, Jaeshik | osolgil@etnews.com