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South Korea’s government and ruling party are moving to accelerate work on security token offerings (STOs), including fractionalized real-world assets such as real estate, as part of a broader push to deepen funding channels for smaller issuers and strengthen the Kosdaq market, according to a February 3 report by The Korea Times. The report said the effort is being discussed in the context of raising Kosdaq competitiveness and follows recent legislative changes that formalize blockchain-based recordkeeping for tokenized securities.
The legal foundation cited in the report is a package of amendments passed on January 15, 2026, which Financial Services Commission described as revising the “Act on Electronic Registration of Stocks and Bonds” and the “Financial Investment Services and Capital Markets Act” to introduce and circulate “security tokens” within the securities framework. In the regulator’s explanation, security tokens remain legally “securities,” but issuance and circulation information can be recorded and managed on a blockchain-based distributed ledger, with issuers required to notify and apply for electronic registration with Korea Securities Depository; the FSC said the revised legislation is expected to take effect in January 2027 (one year after promulgation).
Operationally, the Korea Times report also noted that progress on preliminary approvals for over-the-counter trading platforms for security tokens has been slowed by process-related disputes, highlighting the sensitivity around who will be permitted to intermediate secondary trading in tokenized instruments. Separate Korea Times reporting has described multiple applicants for platform approval and controversy over the fairness of the licensing process, including objections raised by Lucentblock, a firm linked in that coverage to real-estate fractional investment activity under a regulatory sandbox.
The FSC has framed the STO regime as an extension of Korea’s existing electronic securities infrastructure, but with distributed-ledger-based account management and more granular issuance and circulation rules to be developed through a regulator-led consultative body that it said would begin meeting in February 2026. The policy direction is consistent with the regulator’s earlier roadmap to enable issuance and circulation of security tokens within the capital markets framework, including the introduction of brokered OTC trading for certain atypical securities. Real-estate fractional investment activity has also been connected in local reporting to participation in Korea’s financial regulatory sandbox, established under the “Special Act on Support for Financial Innovation.”
What this affects: For issuers, the regime described by the FSC would require STO issuance to follow securities-law pathways, including electronic registration with the depository and compliance with disclosure and investor-protection requirements as they are specified in implementing rules. For platforms and intermediaries, the key practical constraint is that brokerage or intermediation in security tokens is treated as regulated securities business, meaning unlicensed activity would violate applicable law under the FSC’s framework, while the timing and structure of approved OTC venues remains an active regulatory and market-structure question in local reporting.
