Preparation of a Legal Listing Opinion for the Domestic Exchange Listing of an Overseas-Issued Utility Token

Client Information

Corporate / Client

 

Case Details

An overseas blockchain project company (“Company A”) sought to list its utility token on a domestic virtual asset exchange in Korea.

The token issued by Company A was designed for functional use within a Layer 2 blockchain ecosystem based on decentralized identity (DID) and digital trust infrastructure. It was structured to be used solely for functional purposes such as access to platform services and participation in network operations.

In Korea, virtual asset exchanges conduct a critical regulatory review during the listing process to determine whether a token qualifies as a “security” under the Financial Investment Services and Capital Markets Act (the “Capital Markets Act”).

If classified as an investment contract security, the token cannot be listed or distributed on a domestic exchange without compliance with securities registration and licensing requirements.

To proactively address these regulatory risks and secure a formal legal listing opinion for submission during the exchange review process, Company A engaged Decent Law Firm’s Digital Asset Practice Group.

After thoroughly reviewing Company A’s White Paper, token structure, and legal rights framework, Decent’s Digital Asset Practice Group prepared a formal legal opinion for submission to domestic virtual asset exchanges.


1. Opinion on Investment Contract Security Classification

Based on the legal criteria for investment contract securities under the Capital Markets Act, we concluded that Company A’s token does not grant holders any profit-sharing rights, dividend claims, or other proprietary claims.

Instead, the token is linked solely to functional utility within the platform ecosystem.

Relying on Financial Services Commission guidelines and relevant case law, we provided a reasoned legal analysis supporting the conclusion that the token does not constitute an investment contract security.


2. Opinion under the Electronic Financial Transactions Act

We analyzed whether the token could be classified as a prepaid electronic payment instrument under the Electronic Financial Transactions Act.

Given the inherent price volatility of virtual assets and the absence of a fixed monetary value or general payment function, we concluded that the token does not fall within the definition of a prepaid electronic payment instrument and does not trigger electronic financial business registration requirements.


3. Confirmation of Utility Token Classification under the EU MiCA Framework

We further reviewed the token under the EU Markets in Crypto-Assets (MiCA) framework and confirmed that it qualifies as a utility token.

This classification was incorporated into the legal opinion as supplementary support for its non-financial investment product characteristics.


4. Compliance Considerations

In addition to classification analysis, we outlined post-listing compliance considerations, including regulatory risks under the Act on the Protection of Virtual Asset Users, the Criminal Act, the Act on the Regulation of Conducting Fund-Raising Business Without Permission, and DAXA listing best practice standards.