Review of the Securitization of Virtual Asset Businesses Linked to the Real World

Cha & Kwon Law Offices reviewed the white paper on the economy and platform of virtual assets used in real businesses to determine whether virtual assets fall under “financial investment products” or “securities” regulated by the Capital Markets and Financial Investment Business Act (hereinafter referred to as the “Capital Markets Act”).

Securities-related regulations may be applied under the current laws such as the Capital Markets Act if you are operating a virtual asset business linked to real estate or real estate development business. In particular, virtual assets are more likely to be judged as securities if they distribute performance according to success or failure of a business or promise a defined profit.

Determining whether a cryptocurrency is a security subject to capital market laws is an essential part of assessing regulatory risk. However, this requires professional judgment on the actual role of the virtual asset, including the utility of the token, business structure, and profit structure.

If you are in need of legal advice before proceeding with a physical-linked virtual asset business, please contact Cha & Kwon Law Offices, which specializes in the blockchain industry and has expertise in this field.