The Korea Exchange and Koscom-led KDX Consortium and Nextrade-led NXT Consortium have been selected as preliminary licensed operators for the over-the-counter (OTC) exchange (distribution platform) responsible for the distribution of tokenized securities (STOs). The inclusion of the KDX Consortium, which includes major Busan financial institutions, is seen as laying the foundation for the local digital finance industry to take off.
The Financial Services Commission announced on the 13th that it had approved a preliminary approval agenda for over-the-counter (OTC) brokerage services for profit-making securities at its regular meeting and granted preliminary approval to two consortiums. This approval serves as an institutional measure to protect investors and facilitate the distribution of fragmented investment products, which involve trading physical assets such as real estate, copyrights, and artwork in the form of digital securities.
The NXT Consortium received the highest score from the external evaluation committee, with 750 points, followed by KDX with 725 points. Lucent Block, which has been pursuing an STO project since 2018, received only 653 points and failed to receive preliminary approval. The Financial Services Commission explained that the discrepancies in scores stemmed from factors such as capital adequacy, completeness of the business plan, and conflict of interest management systems.
However, the NXT consortium received conditional approval due to technical disputes raised by competitors. The approval process will be temporarily suspended if the Fair Trade Commission initiates an administrative investigation. The Financial Services Commission stated that no criminal proceedings have been initiated to date. Furthermore, it added that it accepted the opinion of the external evaluation committee that there was insufficient objective data to reflect this during the evaluation process.
The two consortia that have received preliminary approval must fulfill the licensing requirements within six months and then apply for full approval. Upon final approval, they will begin official operations. Upon completion of full approval, the authorized distribution platform will be fully operational in the fragmented investment market, which has previously been primarily focused on issuance.
In relation to this, the Busan Metropolitan City issued a press release on the same day, welcoming the decision, stating, "Busan will be hosting Korea's first dedicated fragmented investment distribution exchange." The city evaluated this decision as an example of past policy efforts, such as operating a blockchain regulatory-free zone and promoting demonstration projects, integrating them into institutional financial infrastructure.
The KDX consortium includes approximately 40 participating organizations, including the Korea Exchange, KOSCOM, 24 securities firms, fragmented investment businesses, and fintech, blockchain, and IT security companies. Its capital is reported to exceed 90 billion won, and it plans to establish its headquarters in Busan and build a core IT system. The city also expects that regional financial institutions like BNK Investment & Securities and Busan-Kyongnam Bank will participate, creating opportunities for linkages with local industries.
The city also anticipated that product design would be possible, incorporating Busan's specialized industries, such as shipping, ports, and tourism. Furthermore, it anticipated that the entire ecosystem, from issuance to distribution, trusteeship, and financial support, could be integrated within the region.
Busan Mayor Park Hyung-joon stated, “This bid is the result of our continued efforts to differentiate ourselves from traditional financial centers and build a digital financial foundation,” adding, “We will work with relevant organizations to support the stable establishment of token securities and digital financial industries in Busan.”
