To address the needs of the blockchain enterprises to raise funds through offering cryptocurrencies that have securities nature, the FSC makes it clear that cryptocurrencies having investment nature and liquidity will be considered as securities regulated by the Securities and Exchange Act. It then issued an order in accordance with Paragraph 1, Article 6 of the Securities and Exchange Act on July 3, 2019, which defines that cryptocurrencies with securities nature (securities tokens) as securities regulated by the aforementioned Act.
According to the definition provided by the aforementioned order, the securities tokens refer to those that utilize cryptography and decentralized ledger technology or other similar technology to reveal their value digitally stored, exchanged or transferred, and that have liquidity and the following investment nature:
1. The capital providers make the contribution of funding.
2. Funding is to a common enterprise or project.
3. The capital providers expect to make a profit.
4. The profit depends on the efforts of the issuer or third party/third parties.