Gary Gensler To Hold Crypto Regulation Talks with South Korea: Report

In a landmark development for the global crypto industry, Lee Bok-hyun, the head of South Korea’s Financial Supervisory Service (FSS), is set to engage in crucial discussions with Gary Gensler, the Chair of the United States Securities and Exchange Commission (SEC). 

The meeting, scheduled for January, is anticipated to center around the current state of the cryptocurrency market and the supervisory policies that will shape its trajectory.  A significant aspect of the talks will revolve around the standards the United States employs to assess the security nature of virtual assets, highlighting the importance of international regulatory cooperation in managing borderless virtual assets.

Regulatory authorities recognize the imperative need for collaboration, considering the inherently global nature of cryptocurrencies. An unnamed South Korean government official emphasized the importance of such cooperation, showing the intricate relationship between regulatory decisions in different jurisdictions and their impact on the cryptocurrency market. 

This meeting is important because the U.S. and South Korea are actively shaping their regulatory frameworks for cryptocurrency.

South Korea’s Crypto Legislation and Consumer Protections

South Korea, a significant player in the cryptocurrency trading landscape, has been proactively addressing the challenges the crypto industry poses. The country introduced digital asset legislation to bolster consumer protections for cryptocurrency investors. Scheduled to take effect in July 2024, these enhanced consumer protections respond to a surge in fraudulent activities within South Korea’s crypto community. 

Approximately one-fourth of adults aged 18 to 60 in South Korea engaged in cryptocurrency investments over six months, as reported by KuCoin data, highlighting the country’s prominence in the crypto market.

The regulatory response follows the collapse of Do Kwon’s Terra-Luna ecosystem in 2022, triggering a $40 billion crypto market crash. Kwon, a South Korean crypto entrepreneur, faced legal challenges and was recently at the center of an extradition debate. 

Despite initial reports suggesting possible extradition to the U.S. or South Korea, the Montenegro Appeals Court rejected the decision, emphasizing procedural flaws in the extradition process.

This upcoming meeting between Lee Bok-hyun and Gary Gensler signifies a concerted effort to strengthen regulatory cooperation between South Korea and the United States. Both countries face critical decisions in their regulatory approaches to cryptocurrencies. 

In the U.S., the SEC, under Gensler’s leadership, has faced criticism for its cautious stance on approving spot crypto exchange-traded funds (ETFs). The meeting coincides with the anticipation that the SEC might approve multiple spot Bitcoin ETFs in January, indicating potential shifts in the regulatory landscape.

Additionally, the FSS in South Korea is preparing to implement policies in July 2024 concerning crypto investors’ fund deposits into exchanges and the handling of transactions by firms. These policies show the ongoing efforts to balance fostering innovation in the crypto space and safeguarding investor interests.