Regulatory Delays Widen Gap Among Securities Firms in Digital Asset Market

As competition intensifies among securities firms to dominate the digital asset market, the delay in regulatory legislation is creating a noticeable disparity in preparations among companies.

According to the financial investment industry on June 4, major domestic securities firms expect that guidelines and regulations related to Security Token Offerings (STO) will become clearer this month, prompting them to enhance their mobile trading systems and other platform infrastructures.

However, discussions in the political arena regarding virtual assets and STO legislation have effectively come to a halt due to the recent local elections. Despite having completed technical preparations for market entry, firms are stuck in a 'zero hour' situation, unable to proceed without regulatory approval.

A representative from the Korea Financial Investment Association stated, "All political attention is currently focused on the elections and reshaping the political landscape, leading to a complete suspension of legislative discussions in the National Assembly. Since the previously proposed bills were progressing sequentially, it will take the conclusion of the election period for legislative efforts to resume."

During this regulatory vacuum, the internal organization and staffing of securities firms show extreme variations based on company size and strategy.

Some mid-sized firms have made bold investments in personnel, establishing dedicated teams comparable to larger firms. Hanwha Investment & Securities, for instance, has created a new Future Strategy Office to oversee STOs, real-world asset tokenization, and global expansion initiatives. Notably, they have also set up a 'Digital Asset Research Team' within their research center, hiring specialized personnel as team leaders to build independent infrastructure.

Meritz Securities has similarly established a strategic planning division to serve as a control tower for entering the virtual asset and STO markets. Rather than expanding the organization excessively, they are reportedly creating a system that organically connects traditional securities operations (investment banking and retail) with new digital asset businesses in preparation for market entry.

In contrast, smaller firms with limited financial resources and personnel are finding it challenging to allocate budgets and staff for STO projects, as they do not see immediate profitability. For example, a small securities firm recently began preparations for related business but opted for a 'dual role' approach, assigning STO responsibilities to an existing department that handles retail and overseas product orders, rather than creating a dedicated team. In reality, only two staff members are overseeing this work.

A representative from the small firm remarked, "Unlike larger firms that issue flashy press releases, smaller firms lack the capacity to invest specialized personnel in future projects that do not yield immediate returns. Essentially, we have just added this work under the existing team name."

The securities industry is concerned that as this regulatory gap prolongs, the disparities among firms will become stark when legislation is eventually passed and the market opens. Larger firms with substantial capital can continue to invest in significant equity and enhance their platforms during the legislative pause, while smaller firms may struggle to even take the first step.

An industry insider noted, "Larger firms have the luxury to proactively invest in personnel and costs for new revenue streams related to virtual assets, but smaller firms find it difficult. Ultimately, even when legislation begins, smaller firms will have no choice but to follow the path paved by larger firms, and that gap will only widen."

* This article has been translated by AI.

Yang Boyeon