Security tokens in Korea.Legal from February 2027.
For years Korea’s fractional investments — shares in artworks, music royalties or buildings — ran on temporary sandbox exemptions. On 15 January 2026 the National Assembly passed the amendments that make security tokens part of ordinary securities law. They take effect on 4 February 2027. Below: what the law changes, what the draft rules published in October 2026 propose, who will run the trading venues, what retail investors will be able to buy, and how it is taxed.
Reviewed November 1, 2026 · figures from our live data
The short answer
The amendments to the Capital Markets Act and the Electronic Securities Act passed on 15 January 2026, were promulgated on 3 February 2026 and take effect on 4 February 2027.
Security tokens are securities: issued on a distributed ledger, but registered in the electronic securities system, so the legal record of who owns what stays inside regulated institutions.
Investment contract securities — the usual form of fractional investments — may now also be traded, on licensed over-the-counter venues. KRX-led and Nextrade-led consortia received preliminary approval in February 2026.
Draft rules (consultation 2 October – 11 November 2026) allow stocks, bonds and funds as tokens and cap retail investors at KRW 100 million net purchases a year per venue. They are not final.
Korean security-type tokens in our data today
issuers
What the 2026 law changes
Two laws were amended together. Both apply only in Korea.
- 1
Electronic Securities Act — tokens become registered securities
Security tokens are brought under electronic registration. A token can be issued on a blockchain, but the rights are managed inside the electronic securities system. Issuers that meet set requirements can register as issuer account management institutions and keep the ledger themselves.
- 2
Capital Markets Act — trading becomes possible
Until now investment contract securities could be issued but their trading was restricted. The amendment removes that restriction and allows multilateral over-the-counter trading through the financial investment association, large investment banks and licensed OTC brokerage operators.
- 3
Timing
Passed by the National Assembly on 15 January 2026, promulgated on 3 February 2026, in force from 4 February 2027 after a one-year preparation period.
The draft rules of October 2026
The Financial Services Commission put five sets of detailed rules out for comment from 2 October to 11 November 2026. They still need FSC approval and a cabinet decision.
- 1
What can be tokenized
Besides fractional investment securities, standard securities — stocks, bonds and fund units — may be issued as tokens.
- 2
Ledger requirements
The distributed ledger must have the central securities depository plus at least two account management institutions as participants, so no single company controls the record.
- 3
Issuer account management institutions
Issuers that want to run the ledger themselves need at least KRW 4 billion in equity capital and specialist staff for account management, internal control and IT.
- 4
Limit for retail investors
General (retail) investors may buy up to KRW 100 million a year per OTC venue, counted as total purchases minus total sales. The industry has asked for a higher limit and lower capital requirements; the FSC said it will consider this in the formal process.
Who runs the trading venues
Status as of 1 November 2026.
- 1
KDX consortium — led by Korea Exchange
Received preliminary approval in February 2026 to operate an OTC platform for fractional investment securities.
- 2
NXT consortium — led by Nextrade
Received preliminary approval in February 2026; Nextrade aimed to open a fractional investment market in the fourth quarter of 2026. A complaint by the startup Lucentblock to the Fair Trade Commission could put the full licence review on hold.
- 3
Startups and the licence dispute
Fractional investment startups that built the market under sandbox exemptions criticised the licensing for favouring large players. How they continue after February 2027 depends on the final rules and licences.
- 4
No final licence yet
We found no confirmation of a final OTC venue licence as of 1 November 2026. Until the law takes effect, existing fractional investment platforms operate under their sandbox exemptions.
What it means for investors
- 1
Security tokens are not crypto
They are securities under the Capital Markets Act, bought through licensed institutions with identity checks — not on crypto exchanges. Investor protection and disclosure rules for securities apply.
- 2
How they are taxed
According to a finance ministry view reported in June 2026, tokenized stocks are much closer to securities than to virtual assets, so securities tax rules would apply rather than the planned crypto tax. There is no formal guidance from the National Tax Service yet. See our Korea tax page for the details and the status of the crypto tax.
- 3
Foreign tokenized stocks
Tracker tokens of US stocks sold by foreign issuers are not Korean security tokens and are not covered by this framework.
- 4
What to watch until February 2027
The final detailed rules, the retail limit, the final venue licences and whether existing fractional investment products move onto the new venues.
Questions
When does Korea’s security token (STO) law take effect?+
On 4 February 2027. The amendments to the Capital Markets Act and the Electronic Securities Act passed on 15 January 2026 and were promulgated on 3 February 2026.
How much can a retail investor put into security tokens in Korea?+
Under the draft rules of October 2026, KRW 100 million a year per OTC venue, counted as net purchases. The rules are not final and the industry has asked for a higher limit.
Which assets can be issued as security tokens in Korea?+
Under the draft rules: fractional investment securities plus stocks, bonds and fund units.
Where will security tokens trade in Korea?+
On licensed over-the-counter venues. Consortia led by Korea Exchange (KDX) and Nextrade (NXT) received preliminary approval in February 2026; final licences were not confirmed as of 1 November 2026.
Are security tokens taxed like crypto in Korea?+
According to a finance ministry view reported in June 2026, no: they are treated as securities, so securities tax rules would apply, not the virtual asset tax. The National Tax Service has not issued formal guidance yet.
- Tokenized market in Korea →
- Crypto and token taxes in Korea →
- Tokenized stocks vs real stocks →
- Permissioned vs permissionless tokens →
- FSC — draft subordinate rules on security tokens (Oct 2026, Korean)
- Hankyung — security token bills pass the National Assembly (15 Jan 2026)
- Asia Economy — STO bills pass plenary session
- Law Times — draft rules: ledger requirements and OTC venues
- TokenPost — KRW 100 million limit and KRW 4 billion capital
- Money Today — stocks, bonds and funds as tokens from February
- Korea Times — Nextrade and KRX consortia win nod for STO platforms
- Korea Times — backlash over STO exchange licensing
This guide explains how these products work and is not investment advice or an offer of any security. Who may buy a product is set by its issuer; check the offering documents before investing.