Hanwha Partners with Avalanche for Tokenized Securities Platform in South Korea

Hanwha Investment & Securities has successfully launched a tokenized securities platform that supports Avalanche, as South Korea gears up to integrate blockchain-based securities into its regulated capital markets by February 2027.

According to Seoul Economic Daily, the South Korean brokerage began the platform’s development in collaboration with FairSquare Lab in 2025. The system is designed to function across various networks, including Avalanche and the enterprise Ethereum client Hyperledger Besu.

This development precedes the amendments to South Korea’s Electronic Securities Act and Capital Markets Act, which will take effect on February 4, 2027. These changes will legally recognize distributed ledgers as registration systems for securities, allowing tokenized securities to operate within the current capital market framework.

The Korea Securities Depository is preparing infrastructure that can connect with Avalanche, Hyperledger Besu, and Hyperledger Fabric, granting securities firms multiple blockchain options as they build systems for the forthcoming framework.

Hanwha tokenized securities platform supports Avalanche

Hanwha initiated the platform’s development last year and has reportedly completed the project, as cited by Seoul Economic Daily’s blockchain industry sources.

FairSquare Lab created the system to support more than one distributed ledger. In addition to Avalanche, Hanwha can utilize Hyperledger Besu, which is tailored for enterprise deployments and is compatible with Ethereum.

Numerous South Korean financial firms have already employed enterprise networks like Hyperledger Besu for their token securities infrastructure. Hanwha’s system broadens this approach to Avalanche, enabling institutions to establish dedicated networks with control over participation and validators.

The Korea Securities Depository is working on its own token securities infrastructure to interact with various blockchain technologies. Its disclosed distributed-ledger requirements encompass Avalanche, Hyperledger Besu, and Hyperledger Fabric.

Participation in interconnected distributed ledgers will be limited to authorized institutions, including securities firms and the KSD. The KSD plans to engage directly in these networks to manage overall issuance and electronic registration data.

Demand from financial companies influenced the decision to include Avalanche, as mentioned by a KSD official to the publication; several firms had sought support through consultations and existing projects.

Avalanche has already been utilized for regulated tokenized securities infrastructure in Japan. In July, Progmat transitioned its tokenized securities platform from Corda 5 to a dedicated Avalanche Layer 1, migrating all active security token projects managed on its system.

These projects represented more than 452 billion yen in underlying assets and issued securities at the time of the migration. Progmat stated that the transition made the securities compatible with the Ethereum Virtual Machine while preserving existing institutional controls.

The Japanese platform revamped its architecture, decoupling business functions from a single blockchain, introducing a separate layer between its applications and the underlying ledger. Progmat emphasized that this structure would facilitate connecting to other networks in the future.

South Korea tokenized securities rules start in February

Hanwha’s platform is set to launch as South Korea finalizes the operational framework for tokenized securities before the February rollout.

The Financial Services Commission revealed a three-phase implementation roadmap on September 4, detailing the types of securities eligible for initial tokenization and how the market may expand following the adoption of the amended laws.

Crypto.news previously reported that South Korea’s tokenized securities roadmap will initially include privately pooled money market funds and bonds intended for institutional investors.

Unlisted shares issued through a trust structure and publicly offered fractional investment securities will also qualify in the first phase.

The subsequent phase would extend tokenization to all publicly offered securities. Regulators have not fixed a date for this stage, with its implementation contingent on the outcomes of the initial rollout and technology adoption among market participants.

In the final phase, the FSC plans to establish on-chain payment infrastructure linked to stablecoins, facilitating blockchain-based transactions for tokenized securities.

The timeline for the settlement system will partly depend on pending stablecoin legislation in South Korea.

The roadmap follows amendments ratified by the National Assembly in January that created a legal basis for distributed ledgers to function as securities registers. Tokenized instruments will remain securities under existing financial regulations rather than being classified as a separate asset class.

Regulators have been preparing implementation details for several months. In May, the FSC shared its rulemaking timeline while exploring how stocks, bonds, and money market funds could be incorporated into the system.

At that time, the FSC indicated that South Korea would not transition its entire electronic securities market to blockchain infrastructure all at once but would instead conduct phased tests covering securities rights, trading, settlement, and on-chain payments.

Securities firms face infrastructure requirements

Financial companies connecting their distributed ledgers to the Korea Securities Depository will be subject to screening and operational tests under the KSD’s technical guidelines.

Review processes will evaluate issuance and circulation functions alongside contingency provisions for system errors and other disruptions. The FSC has stated that securities firms must ensure operational stability comparable to the existing electronic securities system while utilizing distributed ledgers.

Existing financial investment companies will not require a separate license solely for handling tokenized securities. Firms may undertake tokenized securities activities that fall within their current licensed business areas.

Companies interested in facilitating tokenized securities transactions in over-the-counter markets must consult with the Financial Supervisory Service beforehand.

Retail investors will also encounter distinct limitations. The FSC has suggested capping individual subscriptions for non-monetary trust beneficiary certificates at the lesser of 30 million won or 5% of the total issuance.

Annual net purchases by retail investors on each OTC exchange will be limited to 100 million won.

Simultaneously, South Korea is preparing central market infrastructure. Samsung SDS is developing a token securities platform for the Korea Securities Depository aimed at bridging blockchain records with the existing electronic securities account infrastructure in the country.

This platform is expected to facilitate issuance, circulation checks, rights management, and monitoring when the new system becomes operational.

Hanwha expands its tokenization investments

Hanwha has devoted several years to building stakes in companies involved in tokenization and blockchain infrastructure.

The conglomerate became Securitize’s largest shareholder after holdings across three affiliated entities reached a total of 9.6%, based on U.S. regulatory filings.

As reported in July, entities linked to Hanwha collectively held 15.69 million shares of Securitize, surpassing Blockchain Capital and Securitize co-founder and CEO Carlos Domingo in share ownership.

A private equity fund managed by Hanwha Asset Management accounted for a 5.9% stake. The H Foundation, a subsidiary of Hanwha Systems, held 3.1%, while Hanwha Investment & Securities controlled around 0.6%.

Hanwha Investment & Securities characterized its own acquisition as a financial investment during a pre-IPO financing round, leaving open the potential for using this investment in its digital asset and real-world asset tokenization endeavors.

Securitize provides tokenized asset infrastructure for financial institutions including BlackRock, Apollo, BNY, Hamilton Lane, KKR, and VanEck. Its platform managed over $4 billion in on-chain assets and supported more than 650 tokenized funds earlier this year.

The company went public on the New York Stock Exchange under the ticker SECZ in July, concurrently issuing blockchain-based versions of its common shares on Solana and Avalanche, which represent the same NYSE-listed shares rather than a distinct class of securities.

Hanwha Investment & Securities has also invested in several other blockchain firms this year, including blockchain research and data company Xangle and Web3 infrastructure provider Kresus.

In July, the brokerage disclosed an investment of 30 billion won, approximately $22.3 million, in Digital Asset, the operator of the institutional-focused Canton Network.

Hanwha Investment & Securities has also increased its involvement in South Korea’s crypto sector by investing an additional 597.8 billion won in Dunamu, the operator of Upbit, raising its ownership stake to 9.84%.