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RWA Regulation

South Korea’s FSC to Study Letting Crypto Exchanges Join STO Market

South Korea’s Financial Services Commission said it will study allowing cryptocurrency exchanges to participate in the security token offering (STO) market, examining market conditions, investor protection, license system integration and combined business permits. FSC Chairman Lee Eok-won endorsed the proposal to use existing exchanges’ technology and trading infrastructure to develop the STO market, saying that infrastructure should be integrated into the token securities market.

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AI take

The significance here is structural rather than immediate: South Korea's regulator is signaling that crypto exchanges could be folded into the regulated token-securities framework instead of kept at arm's length, which would blur the line between crypto trading venues and capital-markets infrastructure. The affected parties are existing exchanges, which would gain a potential new business line, and incumbent securities firms, which would face new competition for STO issuance and trading. The open questions are whether the study converts into licensing rules, how investor-protection and combined-permit conditions are drawn, and whether the FSC's stated interest in leveraging exchange infrastructure survives contact with securities-market incumbents.

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