South Korea’s Financial Services Commission (FSC) has moved tokenized securities deeper into a broader national program to modernize capital-market infrastructure. The regulator said it is coordinating reforms across ministries and market operators, positioning token securities not as a standalone initiative, but as part of a wider effort to improve settlement efficiency and market connectivity.

On Tuesday, the FSC launched a capital market infrastructure review meeting to align policy work with operational plans. The regulator indicated that token securities will continue to be developed through a separate public-private council, with those outcomes subsequently integrated into the broader infrastructure roadmap.

Key takeaways

• The FSC is coordinating token securities work alongside a broader capital-market overhaul, including faster settlement and longer trading hours.
• Legislation already approved by South Korea’s National Assembly recognizes blockchain-based distributed ledgers as securities registries, enabling issuance and transfer of token securities.
• The FSC expects key token securities subordinate regulations and guidelines to be released around July, with the framework scheduled to take effect in February 2027.
• Operational infrastructure is planned for completion by end-2026, including a Korea Securities Depository (KSD) system for settling certain over-the-counter transactions in unlisted shares and fractional investment products.
• Firms should monitor how the token securities framework will be implemented alongside existing investor-protection and market-integrity obligations.

Capital-market infrastructure review folds in token securities

The FSC’s decision to incorporate token securities into a wider infrastructure reform effort reflects a policy approach aimed at aligning digital assets with established market plumbing. In practical terms, this matters for compliance and operational readiness because tokenized issuance and transfer typically require integration with securities registries, settlement processes, custody models, and audit trails.

According to the FSC, the initiative includes a roadmap to shorten the securities settlement cycle, targeted for completion by October. It also includes development of a KSD system intended to handle settlement of over-the-counter trades involving unlisted shares and fractional investment products. The FSC’s timetable places that system by end-2026, preceding the start date for the token securities regime.

FSC Vice Chairman Kwon Dae-young framed the effort as part of four policy priorities: trust, shareholder protection, innovation, and market access. That set of objectives suggests regulators will seek guardrails that preserve investor protections while enabling adoption of technology, rather than treating tokenization as purely a technology experiment.

Legislative groundwork and the planned 2027 rollout

South Korea’s token securities program predates the new capital-market infrastructure review. In January, the National Assembly approved amendments that recognize blockchain-based distributed ledgers as valid securities registries. The amendments also permit the issuance and circulation of token securities, establishing the legal basis required for regulators to build implementation rules and supporting infrastructure.

Per the FSC, the token securities framework is scheduled to take effect in February 2027, contingent on completion of subordinate rules and supporting infrastructure. The FSC said it is targeting July for the release of proposed subordinate regulations and guidelines following work at the public-private token securities council.

Cointelegraph previously reported on the broader legislative direction behind South Korea’s tokenized securities laws, including their expected regulatory treatment and timeline. The FSC’s latest updates emphasize that implementation details remain under active development and will be formalized through additional consultation and rulemaking rather than immediately after the statute’s passage.

For regulated firms, the gap between legislative authorization and effective implementation rules is significant. During this period, businesses typically need clarity on operational requirements such as how token securities will be registered, validated, and reconciled with traditional securities records; what disclosure or investor-protection measures will apply; and how compliance controls will be expected to function in a distributed-ledger environment.

KSD integration and platform development for blockchain-based custody

Infrastructure planning is a core component of the FSC’s approach. The regulator has identified settlement capability through the KSD as a milestone ahead of the February 2027 effective date. The KSD system described by the FSC is intended to support settlement for over-the-counter trades in unlisted shares and fractional investment products.

Separately, Samsung SDS said in May that it won a contract to build a token securities management platform. According to reporting cited by the FSC’s broader communications, the platform is designed to connect the KSD’s existing electronic securities account system with blockchain-based data. Samsung SDS said it aims to complete the platform by February 2027, aligning its delivery with the planned launch of the token securities framework.

The FSC also noted that detailed token securities plans will continue to be discussed within the public-private council before being linked to the broader infrastructure review. This sequencing suggests regulators are attempting to coordinate “digital asset” rulemaking with the more general modernization agenda, potentially reducing the risk of parallel standards that could complicate implementation.

From a governance perspective, integrating blockchain-based data with established depository and accounts infrastructure may also shape how auditability, data integrity controls, and reconciliation processes are implemented—elements that are central to compliance monitoring and investor assurance.

Regulatory implications: investor protection, compliance controls, and cross-border considerations

While the FSC is advancing token securities through a structured timetable, several implementation questions remain relevant for compliance and institutional readiness. The amendments enabling blockchain registries and token issuance establish the legal pathway, but firms will still need to understand how regulators intend to operationalize investor protections and “trust” requirements in distributed systems.

Institutional stakeholders should also consider how token securities will interact with existing market rules governing custody, settlement finality, transfer restrictions, disclosure, and governance. Tokenization can introduce new operational risks—such as data integrity and access control—that require controls comparable to those in traditional securities infrastructure.

Cross-border activity may further complicate matters. South Korea’s approach—embedding token securities within domestic market infrastructure—does not automatically resolve differences with other jurisdictions that have distinct regulatory frameworks for tokenized instruments. For firms operating internationally, that means compliance programs may need to map how token securities obligations align (or diverge) across regulatory regimes.

In the European context, for example, MiCA provides a framework for certain crypto-asset activities, but its scope and alignment with tokenized securities rules depends on how a given product is classified. Similarly, in the United States, the regulatory landscape for tokenized securities has historically depended on securities-law analysis and enforcement posture. Even though the FSC’s initiative is a Korean domestic reform, global institutions will likely evaluate it through the lens of their existing compliance and legal risk management practices.

Closing perspective

South Korea’s FSC appears to be moving toward an integrated model in which tokenized securities are introduced alongside settlement modernization and broader market-access reforms. The next critical milestones are the public-private council’s subordinate regulations and guidelines targeting July, followed by the February 2027 effective date. Observers will likely focus on how regulators translate the legal recognition of blockchain-based registries into enforceable operational standards for custody, settlement, investor protection, and auditability.

South Korea’s financial regulator folded token securities infrastructure into a broader overhaul of the country’s capital markets, alongside plans for faster settlement, longer trading hours and greater use of artificial intelligence.

On Tuesday, the Financial Services Commission (FSC) said it had launched a capital market infrastructure review meeting to coordinate reforms across government agencies and market operators. According to the FSC, plans for token securities will be further discussed separately through a public-private council before being linked to the wider initiative. 

The initiative includes a roadmap for shortening the securities settlement cycle, expected by October, and a Korea Securities Depository (KSD) system for settling over-the-counter trades in unlisted shares and fractional investment products by the end of 2026. 

The move places tokenized securities within the country’s broader effort to modernize traditional financial markets, potentially bringing blockchain-based investment products closer to systems used for mainstream securities settlement and trading. 

FSC Vice Chairman Kwon Dae-young said the initiative would build on broader efforts to improve the capital market, guided by four policy priorities: trust, shareholder protection, innovation and market access.

South Korea prepares token securities framework for 2027

South Korea’s token securities initiative predates the latest capital-market review. In January, the National Assembly approved amendments recognizing blockchain-based distributed ledgers as valid securities registries and permitting the issuance and circulation of token securities. 

According to the FSC, the framework is scheduled to take effect in February 2027, after regulators complete subordinate rules and supporting infrastructure. At the second meeting of its public-private token securities council in May, the FSC said it was targeting July for the release of proposed subordinate regulations and guidelines. 

Related: South Korea reviews Hana Bank’s Dunamu stake under banking rules: Report

Technical infrastructure is also under development. Samsung SDS said in May that it had won a KSD contract to build a token securities management platform that connects the depository’s existing electronic securities account system to blockchain-based data. The company aims to complete the platform by February 2027, when the new framework is scheduled to take effect.

According to the FSC, detailed token securities plans will continue to be discussed by the public-private council before being linked to the broader review, part of South Korea’s preparations for a real-time, continuously accessible and integrated digital market.

Magazine: Japanese pension fund tips 1% in crypto, G7 urges action on NK hackers: Asia Express

The investment bolsters concerns about foreign influence, originally stemming from a major investment by MGX, a UAE state-backed investment company, that boosted the market capitalization of the Trump family’s stablecoin by almost $2 billion overnight.

Here’s where it gets interesting. Within months of the deal, the Trump Administration took policy decisions that benefited the UAE, according to the letter. In May 2025, it approved a $1.4 billion arms sale to the country, despite congressional concerns about weapons flowing to armed groups in Sudan where more than 150,000 people have died.

In the same month, Treasury created a “Known Investor Pilot” program to streamline investment approvals through CFIUS, a fast-track process that the UAE had lobbied for.

The Department of Commerce also rescinded Biden-era chip export restrictions, allowing the UAE to receive up to triple or quadruple the number of advanced chips it previously could have imported. It authorized G42, a UAE AI company chaired by Sheikh Tahnoon bin Zayed Al Nahyan, to receive 35,000 Nvidia Blackwell chips. The deal was worth over a billion dollars.

But U.S. intelligence officials reportedly caught G42 providing U.S. technology that was used to enhance China’s missile capabilities. Though G42 allegedly committed to divesting its Chinese holdings, reports suggest the firm attempted to obfuscate its ties to Beijing by moving its business holdings in China to a new investment firm.

Key Takeaways

• SanDisk (SNDK) shares reached a 52-week peak of $2,354.39 on June 22 before retreating, maintaining a remarkable 700%+ gain in 2026.
• The decline coincided with a major selloff in South Korea’s Kospi index and mounting uncertainty over AI memory spending sustainability.
• According to Morgan Stanley, SanDisk views AI as “fundamentally changing” NAND dynamics, fueled by inference workloads and expanded LLM context windows.
• Third quarter FY2026 revenue exploded 251% versus prior year to $5.95 billion, crushing Wall Street’s $4.55 billion forecast.
• Fourth quarter outlook projects revenue between $7.75B and $8.25B, with non-GAAP EPS guidance of $30 to $33.

SanDisk (SNDK) shares have delivered one of 2026’s most impressive performances. Following a year-to-date surge exceeding 700%, the stock peaked at $2,354.39 on June 22 before encountering turbulence.

Sandisk Corporation, SNDK

The memory chip maker experienced a steep decline alongside sector peers, pressured by a significant downturn in South Korea’s Kospi benchmark and emerging concerns regarding the durability of AI-fueled memory demand. SNDK has retreated approximately 13.6% in the recent selloff and is down roughly 5.75% across the past five sessions. Trading data shows the stock hovering around $1,963.60.

Despite this correction, shares remain elevated 32.8% over the trailing 30-day period. This perspective is crucial — the current volatility represents the first significant challenge to the AI memory narrative since SanDisk separated from Western Digital in early 2025.

AI’s Transformative Impact on Memory Markets

Morgan Stanley’s Joseph Moore highlighted that SanDisk sees AI as “fundamentally changing” NAND dynamics. The primary catalyst is inference workload requirements. With large language models demanding expanded key-value caches and broader context windows, DRAM capacity alone proves insufficient — positioning NAND to occupy a higher tier in the memory architecture.

Cloud infrastructure is projected to emerge as NAND’s dominant end market before year-end. This transition is already visible in SanDisk’s financials, with data center revenue skyrocketing 233.4% sequentially to reach $1.47 billion during Q3 FY2026.

The third quarter results, announced April 30, exceeded expectations dramatically. Revenue totaled $5.95 billion, representing a 251% year-over-year increase and substantially outpacing the $4.55 billion analyst consensus. Non-GAAP EPS delivered $23.41 compared to the $14.36 estimate. Non-GAAP gross profit surged 1,111.9% annually to $4.7 billion. Additionally, the company achieved debt-free status, closing the quarter with $3.7 billion in cash reserves.

Shares climbed 3.04% on the earnings announcement and continued upward with an 8.25% gain in the subsequent trading session.

Forward Outlook and Valuation

For Q4 FY2026, management projects revenue ranging from $7.75 billion to $8.25 billion, with non-GAAP EPS between $30 and $33. Wall Street analysts forecast Q4 EPS of $31.81, representing a staggering 158,950% year-over-year increase.

QLC Stargate products — which have undergone hyperscaler qualification testing for over twelve months — are anticipated to commence revenue-generating shipments in Q4, supplementing existing TLC product momentum.

Notwithstanding the impressive rally, SanDisk commands a forward adjusted P/E ratio of 34.13 and a price-to-sales multiple of 17.17, both exceeding industry benchmarks. Its trailing P/E of 64.5 surpasses the industry norm of 44.5. Current pricing also sits approximately 12% above the consensus analyst target of $1,863.06.

Among 21 analysts tracking SNDK, 18 assign a “Strong Buy” rating, one recommends “Moderate Buy,” and two rate it “Hold.” Morgan Stanley holds an “Overweight” stance with a $1,750 price objective. The highest Street target stands at $3,250.