South Korea and the United States are gearing up for discussions on cryptocurrency and digital asset regulation. Governor Lee Bok-hyun, the head of South Korea’s financial watchdog, is slated to meet with Gary Gensler, Chair of the US Securities and Exchange Commission, in May.
The focus will be on two crucial matters: the classification of non-fungible tokens (NFTs) and the approval of spot Bitcoin exchange-traded funds (ETFs).
Currently, NFTs are not considered “virtual assets” in South Korea, meaning they aren’t directly regulated by financial authorities. This meeting aims to determine if NFTs should fall under the same classification, potentially subjecting them to stricter regulations like those imposed on crypto service providers. Tightened regulations in September 2021 led to the closure of over half of South Korea’s crypto exchanges due to compliance issues.
The discussion will also tackle the contentious issue of spot Bitcoin ETFs. While such investment products are currently prohibited in South Korea, both ruling and opposition parties have expressed interest in launching local spot Bitcoin ETFs ahead of the upcoming general election in April. This reflects the increasing demand for these investment options among South Korean investors.
This forthcoming dialogue marks a significant stride towards establishing a comprehensive regulatory framework for cryptocurrencies in South Korea. The country’s regulatory measures to safeguard crypto investors are set to come into effect in July this year.