Securities and Exchange Commission Chair Gary Gensler has described the cryptocurrency industry as "the Wild West"
Securities and Exchange Commission Chair Gary Gensler POOL / EVELYN HOCKSTEIN

KEY POINTS

  • The FSC previously said brokering foreign-listed spot Bitcoin ETFs 'may violate' Seoul's current virtual assets stance
  • The South Korean financial regulator did say it will review overseas changes in crypto regulations
  • South Korean authorities have been on edge since the Do Kwon case came to light

South Korea's chief of the Financial Supervisory Service (FSS), Lee Bok-hyun, is expected to meet U.S. Securities and Exchange Commission (SEC) chief Gary Gensler during the second quarter of the year to discuss several cryptocurrency topics, including the spot Bitcoin ETF (exchange-traded fund), local publication Hankyung reported Monday.

During his business plan 2024 reveal in Seoul on Monday, Lee said "there are areas where we will focus on issues such as virtual asset issues and Bitcoin spot ETF," as per a Google translation of the report. He also noted that "the impact of SEC policy on the world" is "important."

Aside from a meeting with Gensler, Lee will also visit some of the United States' major financial markets such as New York, as per the report.

Lee's announcement came after South Korea's Financial Services Commission (FSC), the country's top financial regulator, warned local firms against brokering spot Bitcoin ETFs from the U.S.

At the time, the FSC said in a press release that South Korean securities firms brokering foreign-listed spot Bitcoin ETFs "may violate" the government's current stance on virtual assets and may also breach the Capital Markets Act. The press release noted that South Korea's regulations on cryptocurrency were constantly evolving and the FSC is looking to review its regulations associated with overseas changes in crypto guidance, specifically changes in the U.S.

The warning came after the SEC gave the greenlight to 11 Bitcoin ETFs in a landmark decision that led to a broader market-wide rally.

In December, vice chairman of the FSC, Kim So-young, said at a conference that the South Korean regulator will consider innovation more as the country moves toward the next stages of regulating crypto.

The country enacted legislation on virtual assets last year with an aim to protect crypto investors. The legislation will come into effect from July and should put more regulatory control into South Korea cryptocurrency markets.

South Korea's move toward crypto regulation came following a series of cryptocurrency troubles, such as the highly-followed Do Kwon case that triggered concern among domestic authorities over the possible pitfalls in crypto markets.

Earlier last year, South Korean authorities moved to prevent Do Kwon, the co-founder of blockchain protocol and payment platform Terraform Labs (TFL), from accessing any of his assets believed to be kept on Binance, the world's largest centralized crypto exchange platform by trading volume.

The SEC slapped Kwon and TFL with a lawsuit, accusing them of orchestrating a massive securities fraud tied to the Terra USD (UST) and LUNA crypto assets. TFL has since filed for Chapter 11 bankruptcy, saying its filing was "critical" in helping the crypto platform in its bid to appeal the "single largest claim" by the SEC against Terraform.

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