South Korea’s Financial Services Commission (FSC) released a report that defines cryptocurrencies as well as sets rules and penalties for token issuers.
New regulations will apply to both individuals and platforms that mint non-art NFTs for trading and decentralized finance projects.
According to another section of the report, token issuers who want to sell their tokens on Korean exchanges must follow certain rules, and those who make profits “through market manipulation or trading on undisclosed information” may face sanctions.
The report focuses first on businesses issuing tokens, including ICO operators, Decentralized Autonomous Organizations (DAOs), and non-fungible tokens (NFTs) minting services.
As part of the FSC’s requirements, these companies must submit a white paper, obtain a favorable rating from a token evaluation service, conduct a legal review, and report regularly on their financial performance.
The penalty for violating the rules is at least five years in prison plus three to five times the amount of the unfair profit.
