South Korea’s regulators to inspect crypto-staking services
The crypto industry has expressed concern as regulatory scrutiny continues to intensify. In today’s news, South Korean financial authorities revealed plans to investigate cryptocurrency betting services in the region.
South Korea follows the SEC Crypto Staking Regulations
This regulatory implementation comes shortly after crypto exchange Kraken’s case with the US Securities Exchange Commission (SEC), where the US regulator cracked down on the company’s betting program and accused the exchange of violating securities laws.
The South Korean regulator’s latest move to investigate betting services appears to be in the wake of last week’s SEC crackdown on digital assets. According to the SEC, these services and products are considered unregistered securities.
Meanwhile, the Korean regulator has yet to provide further details on the timeline and methods of the investigation into the staking services. However, the move is said to affect some legislative decisions.
Unlike the SEC, which targeted a specific cryptocurrency exchange that issued the staking services, the Korean regulator is more focused on the national staking services.
SEC breakdown this past week
Over the past week, the SEC has been wreaking havoc on major players in the digital asset industry. Last week, the regulator tapped the American cryptocurrency exchange Kraken charged two subsidiaries, Payward Ventures Inc and Payward Trading Ltd, with failing to register the staking-as-a-service program.
Following this, Kraken agreed to immediately cease the betting program and settle the SEC with a $30 million fine for disgorgement, prejudgment interest and civil penalties. A week after, the SEC targeted the industry’s second largest stablecoin, BUSD, the Binance brand.
On Monday, the SEC issued Paxos — BUSD issuer — a Wells Notice for sale and listing of unregistered securities, as the regulator BUSD and other assets fit with this concept. This resulted in the stablecoin issuer having to halt the distribution of BUSD and debase the stablecoin for a while early on Monday.
This news has caused tremors in the stablecoin market, especially in the dollar-backed sector, as investors sought a new option to be less exposed to the volatile cryptocurrency market. According to Binance’s CEO, the industry could see the emergence of other assets and even algorithmically backed stablecoin.
In a Twitter Space Q&A on Tuesday, CZ said:
The amount of pressure placed on stablecoins is quite significant. Several agencies are putting pressure there. That will shrink the USD stablecoin market, so the industry is exploring its options.
While the SEC continues to crack down on various firms and services in the industry, the market has shown little reaction to the news. Over the past few days, the global cryptocurrency market capitalization has remained above $1 trillion.
At the time of writing, the global cryptocurrency market cap is valued at $1.106 trillion, up 2.7% in the last 24 hours.
Featured image from UnSplah, chart from TradingView.
