South Korea's Financial Watchdog Probes Into the Securities Nature of P2E Tokens
Amid a civil complaint on WeMade's WEMIX token, South Korea's Financial Services Commission is now assessing whether P2E tokens should be considered security assets.
South Korea's Financial Services Commission has its eye on P2E tokens
Last Thursday, local news outlet Law Times reported that South Korea's Financial Services Commission (FSC) is now looking into the securities nature of P2E (play-to-earn) tokens. The move came after a civil lawsuit alleges that the WEMIX token issued by gaming giant WeMade is, in fact, a security asset.
"Whether the Wemix token is a security is related to the issue of setting the scope of security tokens. The authorities are currently discussing this part, and the judgment can only be made by setting standards," said a Financial Services Commission staff pertaining to the case.
So what if cryptocurrencies (and also P2E tokens) end up being securities in South Korea? In that case, any firms that issue P2E tokens in the country, including WeMade, must submit a securities registration form to the Financial Services Commission. And, they can only list those tokens on exchanges with investment brokerage licenses.
A love-hate relationship with blockchain games
If you've dabbled in the GameFi space for a while, you would've surely known about the country's love-hate relationship with P2E games. As of now, the South Korea Game Rating and Administration Committee does not allow any blockchain games to be released domestically due to gambling concerns.
Earlier, President Yoon Suk-yeol promised to lift the ban on Web3 games to foster blockchain innovation in South Korea. But since Yoon took office in May, his administration has not shown any intent to remove such a ban. Seeing how things stand, it's unclear whether the local watchdogs will choose to tighten the regulations around this space.
Even so, many South Korean gaming industry players like Netmarble, Com2uS, Kakao Games, Nexon, and Krafton are hell-bent on launching P2E titles. Only time will tell if blockchain games can find their footing in the East Asian country.