South Korea Says Tokenized Stocks Are Securities, Not Crypto

South Korea's finance ministry has classified tokenized stocks as securities under the Capital Markets Act, not as virtual assets under the crypto framework, according to a Bloomingbit report on June 12. The classification determines tax treatment and regulatory oversight for tokenized equity positions.

If the Financial Services Commission agrees with the ministry's view, existing securities taxation would apply immediately. Gains on tokenized stock holdings would become subject to capital gains tax rates and reporting rules that differ from the regime governing crypto assets. The crypto framework in Korea allows a deduction threshold and a 20% tax rate on gains above 2.5 million won, though implementation has been delayed. Securities taxation follows a separate schedule with different rates and withholding requirements.

The distinction matters for investors holding tokenized stocks on domestic platforms. Under the crypto umbrella, such positions might have qualified for lighter tax treatment or a later effective date. The securities classification removes that uncertainty but imposes steeper compliance costs. Exchange operators listing tokenized stocks would also need to consider licensing rules for securities platforms if the classification becomes final.