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S.Korea finance regulator: crypto can be subject to capital markets law

Legal

forkast.news 16 September 2022 08:13, UTC
  
Reading time: ~2 m

South Korea’s Financial Supervisory Service (FSS) governor Lee Bok-hyun says he disagrees with the view that crypto cannot be seen as financial investment products or securities, while revealing he assisted local prosecutors in designating Terra-LUNA tokens as securities, according to local media reports.

See related article: Securities or not? South Korea to evaluate Terra’s LUNA token

Fast facts

  • “As a person in the field of law and financial services, [I hold] the opinion that under certain circumstances, [crypto] can be judged as securities,” said Lee at a press conference on Thursday.
  • Lee acknowledged that it is not the unique right of the financial authorities to decide whether a subject is a security, and that prosecutors hold that right as well.
  • South Korean prosecutors investigating the fall of Terra-LUNA issued an arrest warrant on Wednesday for Terra cofounder Do Kwon and five other affiliates on charges of violating the capital markets law.
  • This came on the basis that the prosecutors saw Terra’s now-defunct stablecoin and sister cryptocurrency as securities.
  • South Korea President Yoon Suk-yeol announced earlier this year his administration it will regulate crypto in two ways — tokens that resemble securities and non-securities.
  • The government plans to regulate securities-like tokens under the existing capital markets law, while non-security tokens, or utility tokens will be supervised under an upcoming law on cryptocurrencies.
  • The country’s financial authorities have yet to designate which cryptocurrencies will be regulated as securities.

See related article: South Korea issues arrest warrant for Terraform Labs CEO Do Kwon 


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