[이데일리 김소연 기자] The financial authorities judged the Music Cow product, which operates a music copyright sculpture investment platform, as ‘securities’. It is noteworthy because it means that fragmented investments in virtual assets such as copyrights will be regulated by financial authorities. Supervisors have called for special caution from investors in piece investing.
On the 20th, the Securities and Futures Commission (Security and Securities Commission) under the Financial Services Commission held a meeting and judged whether the right to claim participation in Music Cow’s copyright fee was securities. The Securities and Exchange Commission considered the music cow claim to be an ‘investment contract security’ under the Capital Market Act.
Music Cow sells ‘claims’ to investors by dividing the right to receive the distribution of profits from the copyright of a specific sound source. Music Cow gained popularity by operating a platform that allows investors to trade profit rights under music copyrights. The service started in 2017, and the number of members increased to 910,000 last year. It is estimated that regarding 169,000 members actually participated in the investment.
According to this decision, Music Cow will be subject to restrictions under the Capital Market Act. Until now, Music Cow is subject to sanctions because it has been soliciting and selling securities without submitting a securities declaration form or small public offering documents. However, this business structure is a new type of right created by Music Cow, and considering the low awareness of the illegality and the lack of intentionality, the sanctions procedure has been suspended for the time being.
However, the financial authorities suggested that Music Cow should prepare an investor protection device that matches the business contents. Music Cow must change its current business structure within six months from the date of resolution by the SSC to strengthen investor protection and report the results to the Financial Supervisory Service.
In principle, both the claim issue market and the secondary market should not be operated. However, to protect investors, exceptions were made if a conflict-of-interest prevention system or a market monitoring system was in place. In addition, appropriate explanatory materials and standards for claim structure, etc., should be prepared, and terms and conditions should be issued.
Accordingly, existing investors can continue to trade on the Musiccow platform. The issuance of new claims other than those already issued is prohibited until the SSC approves them. An official from the Financial Services Commission emphasized, “Once the business reorganization is completed with this decision, the stability of claims held by existing investors will be further strengthened.”
According to the SSC’s decision, sculpture investment products, which are recently emerging in various fields such as music and art, are highly likely to be included in the financial supervision regulations. The financial authorities are planning to publish ‘guidelines related to new securities business such as piece investment’ in the near future. An official from the financial authorities emphasized, “The legal structure of the invested assets and related risks should be thoroughly reviewed and investments should be made with caution.”
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