South Korean tax authorities are preparing to treat token shares as securities instead of tangible assets, a move that could bring the fast-growing sector into the country’s existing tax framework once financial regulators finalize their legal interpretation.
Summary
- South Korean tax authorities have said the token shares could face immediate taxation if financial regulators classify them as securities.
- Officials pointed out that overseas token trading may also fall under existing securities tax laws based on the structure of economic rights.
- The move comes as the global stock market has grown to nearly $1.5 billion, fueled by growing demand for blockchain-based access to stocks like Tesla and Nvidia.
According to comments from South Korea’s Ministry of Economy and Finance shared with local outlet Bloomberg Bit, the government currently considers token shares as securities despite their blockchain-based structure.
The ministry said that if the Financial Services Commission decides that the token shares qualify as securities, taxation can begin immediately under existing capital markets laws without requiring new legislation.
Officials told the publication that equity tokens may take the form of digital assets, but their economic characteristics are very similar to traditional securities.
The ministry also pointed to previous guidance from financial regulators, which emphasized that assets that meet the characteristics of securities should be regulated as securities regardless of the technology used to issue them.
Interest in token shares has grown rapidly over the past year as investors seek blockchain-based access to publicly traded companies.
Data from RWA.xyz showed the token’s stock market reached $1.47 billion as of June 8, up 115% since the beginning of the year.
Stock market value. Source: RWA.XYZ
Demand has been particularly strong for investors seeking exposure to US companies such as Tesla and Nvidia through platforms that offer round-the-clock trading and quick settlement.
Financial regulators continue to clarify the law
Attention now turns to the Financial Services Commission, which is expected to release revisions to its guidelines for token securities and related regulations in July.
Earlier, during the second public-private securities task force meeting in May, the commission said it will develop a detailed roadmap for the issuance of common securities tokens, including listed shares.
A legal interpretation classifying token shares as securities could pave the way for tax collection during the second half of 2026.
South Korean regulators have already laid the groundwork for that approach. In its 2023 token securities guidelines, the commission stated that token securities issued in digital asset form fall under the Capital Markets Act.
However, those guidelines focused more on partial ownership products tied to assets such as real estate, works of art, and intellectual property, leaving uncertainty about token versions of common shares.
Because of that uncertainty, many market participants had assumed that token shares would be treated the same as physical assets and remain tax-free until South Korea’s physical asset tax system goes into effect next year.
Overseas trading can also fall under tax laws
The Ministry of Economy and Finance has indicated that the tax will not be limited to domestic products.
Officials told Bloomberg Bit that the securities tax under existing law is based on the economic rights attached to the asset rather than its issuance.
As a result, token stock transactions conducted through overseas platforms may continue to be subject to South Korean tax laws if underlying rights are deemed equivalent to securities.
The service also noted that future classifications may depend on certain features attached to the tokens. Depending on whether voting rights are included, token shares may be classified as common shares, derivative-linked securities, or investment contract securities.
At the same time, South Korean tax authorities and the National Tax Service are working to strengthen information-sharing arrangements with foreign tax agencies, including the US Internal Revenue Service, to improve transparency in transactions conducted through overseas platforms.
The regulatory push comes as the cryptocurrency gains momentum around the world.
According to a report by Binance Research, token shares have become the fastest growing part of the real estate sector, with a market value increasing by 422% since the beginning of 2025.
The research firm attributed much of the growth to platforms that provide blockchain-based access to traditional stocks and exchange-traded funds.
Growing activity on platforms such as xStocks and Ondo Global Markets has further fueled investor interest in blockchain-based securities, increasing pressure on regulators to clarify how existing financial and tax laws should apply to the sector.
