Gary Gensler Meets Chief of South Korea’s Financial Regulator
Financial Supervisory Service (FSS), the regulatory agency from South Korea has set up a meeting with the SEC of the United States. As per the official news, FSS head Lee Bok-Hyun has arranged a meeting with SEC chief Gary Gensler to discuss regulations for the cryptocurrency industry. Chosunbiz published that Lee will visit the SEC in January next year.
The Major Purpose Behind Meeting
The main objective of the meeting is to discuss regulatory requirements regarding the blockchain sector. Furthermore, the heads of both regulatory agencies will also discuss topics such as the status of policies and the scope of legislative provisions for the sector.
The firm has noted that regulations will pave the way for borderless digital currency transactions. As per the comments of South Korean government official, the meeting is finalized at a critical time for regulatory agencies from both nations.
South Korean Regulators to Introduce Crypto Policies in 2024
FSS, the regulatory agency from South Korea, that is monitoring the local blockchain sector has declared an aim to introduce new regulatory policies for the sector in 2024. The agency noted that investors should be able to earn interest based on the ratio of their deposits on a trading platform.
The new regulations are set to become active by July 2024. However, FSS has retained that NFTs and CBDCs are not included in the policy.
At the same time, regulators have also noted that NFTs that operate as payments may be included in the yield generation policy. Furthermore, FSS regulators are also to standardize customer deposits for digital currency service providers. The regulation mandates that firms need to manage account holder deposits and enterprise funds separately.
At the same time, the policy amendment has noted that trading platforms should leverage the services of a bank to manage enterprise funds. Furthermore, the digital asset firms are required to store at least 80% of self-funds in cold storage.
Regulatory Requirements for Virtual Asset Firms
FSS also added provisions for cybersecurity concerns for virtual asset firms. The agency has noted that firms from the sector need to use a standardized method to prevent hacks or exploits. One of the preventive procedures is to apply for insurance and maintain backup reserves.
Additionally, the agency intends to prohibit blocking withdrawals or deposits unless required by legal decree of court or financial regulators.
On the other side of the border, the SEC has received many applications for Bitcoin spot ETF. However, the regulator has yet to grant a green light on the matter. On the other hand, the agency has approved futures ETFs for digital assets.
The federal agency has quoted Howey Test and the 1946 Supreme Court decision regarding citrus groves as the basis for categorizing almost all digital assets as unregistered securities. However, legal experts such as Mark Bini have argued that the laws do not cover all plausible counterpoints.
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