South Korean Regulator ‘Not Meeting SEC to Talk About Crypto’s Securities Status’

SEC South Korea

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Tim Alper

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Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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June 25, 2023

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A top South Korean financial regulator has denied reports claiming it is set to cooperate with the United States on efforts to classify certain cryptoassets as securities.

Per Hanguk Kyungjae, the South Korean Financial Supervisory Service (FSS) stated that reports that it was planning to meet the US Securities and Exchange Commission (SEC) to determine the securities properties of cryptoassets were wide of the mark.

The FSS conceded that a number of key officials were hoping to travel to Washington, where they would indeed meet the SEC. But the FSS said that crypto would not be on the meeting agenda.

What Does South Korean Regulator Want to Meet SEC About, if Not Crypto’s Securities Status?

An FSS official was quoted as stating:

“It is true that we are preparing to embark on a business trip to the SEC. But the meeting will be about corporate data disclosure reviewing protocols, not cryptoassets.”

The SEC and its Chairman Gary Gensler have repeatedly claimed that tokens whose protocols make use of staking mechanisms may be considered securities.

South Korean regulators, meanwhile, hope to draw clearer lines between tokens that can be viewed as commodities and those that can be viewed as securities. This, prosecutors hope, will allow them to bring legal action against Terraform Labs executives.

Prosecutors want to bring the missing Terraform CEO Do Kwon to court on fraud charges. But the prosecution’s entire case rests on defining Terra ecosystem coins as securities.

Gensler has suggested that no cryptoasset – with the exception of Bitcoin (BTC) – should be considered to be a commodity. Seoul, media outlets previously reported, wants to seek clarification on these matters.

But the FSS stated that the SEC had not yet responded to its request for a meeting. Industry and political insiders think Seoul wants to hear details of Washington’s stance before it issues its own securities token offering (STO)-related guidelines.

Scores of South Korean firms are hoping to move into the STO sector, with many vowing that their offerings will be ready for the market before the year is out.

But politicians are still yet to give these firms the official green light – and may be waiting on the SEC before making a firm commitment.