- The chief of South Korea’s Financial Supervisory Service has scheduled talks with SEC Chair Gary Gensler
- Lee Bok-hyun will discuss NFT classification and spot Bitcoin ETF approval with the SEC chair.
- Lee’s reliance on Gensler’s insights suggests the outcome regarding NFTs may already be predetermined
South Korea’s Financial Supervisory Service (FSS) chief, Governor Lee Bok-hyun, is scheduled to hold talks with Gary Gensler, the chair of the United States Securities and Exchange Commission (SEC), in May. The meeting aims to address the classification of non-fungible tokens (NFTs) and the approval of spot Bitcoin exchange-traded funds (ETFs). Lee is thought to be seeking clarity on the treatment of NFTs, although it’s fair to say that if he is reserving his research to the thoughts of Gary Gensler then the result is a fait accompli.
Governor Lee Looking for Advice
South Korea does not currently categorize NFTs as virtual assets, citing their minimal impact on financial markets compared to cryptocurrencies. However, with the surge in speculative activity surrounding NFTs alongside major crypto valuations, South Korean news outlet Edaily reports that Governor Lee is looking for guidance from his peers as to whether NFTs should be legally classified as virtual assets.
Designating NFTs as virtual assets could subject issuers and distributors to stringent regulatory measures similar to those imposed on local crypto service providers. In September 2021, when South Korea implemented its initial requirements for crypto exchanges, over half of the country’s trading platforms shuttered due to compliance challenges.
Gensler’s Opinion Widely Known
Governor Lee and Gensler are also expected to discuss the potential approval of spot Bitcoin ETFs in South Korea. Presently, local institutions face restrictions on launching crypto-related products, and brokering overseas-based spot bitcoin ETFs is prohibited.
Despite regulatory hurdles, both ruling and opposition parties in South Korea have announced intentions to support the launch of local Spot bitcoin ETFs before the April 10 general election, fueling optimism among domestic investors. Despite approving a dozen Bitcoin ETF applications last month, Gensler is famously still anti-Bitcoin and so will only have one viewpoint as far as that is concerned, too.
South Korea’s comprehensive regulatory framework, aimed at safeguarding crypto investors, is slated to begin its first phase in July, with further development underway to establish standards for crypto token issuance and information disclosure.
