Crypto may be subject to the Capital Markets Act
The governor of South Korea’s Financial Supervisory Service (FSS), Lee Bok-Hyun, has indicated that virtual assets may form part of the country’s securities and capital markets law.
Lee said at a press conference: “I disagree with the view that some virtual assets do not have parts that can be recognized as financial investment products or securities.”
How will crypto be judged?
The official added that as a lawyer or someone in charge of financial affairs, he believes that “if certain qualifications are met, it can be judged as securities,” going on to say “material is available.”
Meanwhile, local media reported that the director had provided prosecutors with information about their investigation into the Terra Luna collapse, including the assessment of virtual securities.
The latest view from the regulator contrasts with its stance in 2017. Around that time, the Financial Supervisory Service of South Korea stated that it did not view Bitcoin and other cryptocurrencies as currencies and would not further regulate their trading.
Last month, however, South Korean prosecutors searched the residence of Terraform Labs co-founder Daniel Shin to investigate any criminal activity. Meanwhile, a Seoul court has issued an arrest warrant for Terra co-founder Do Kwon and five other executives.
As the Terra collapse triggered action by domestic authorities, President Lee also clarified how prosecutors and financial authorities can judge the properties of securities.
He emphasized: “Finally, if the requirements are met, I believe that if the authorities have the authority to make judgments not only through the interpretation of laws and regulations or systems, but also by specific legal institutions, I believe that discretion can be made.
“But we had every reason to be cautious,” he said.
South Korea enters Web3 as they regulate the sector
To encourage the growth of the metaverse, members of South Korea’s ruling party draft a metaverse industry promotion law, Be[In]Crypto reported recently.
Following this, South Korea’s Ministry of Science and Information and Communication Technology (ICT) released the first set of ethical principles for the metaverse.
Last month, the authorities also said that a gift tax would be imposed on cryptocurrency airdrops within a tax bracket of 10% to 50%.
In particular, South Korea is in the midst of regulatory changes as new players enter the crypto and metaverse markets.
The series of changes followed when the current president of South Korea, Yoon Suk-yeol, expressed his intention to allow the crypto sector to grow while lifting the initial coin offering (ICO) ban in the country earlier this year.
On August 29, the Bank of Korea also published a national article on the “European Union Crypto Asset Market Act (MiCA)” arguing for allowing ICOs in the country.
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