The head of South Korea’s financial watchdog, Governor Lee Bok-hyun of the Financial Supervisory Service, is scheduled to meet with Gary Gensler, Chair of the United States Securities and Exchange Commission (SEC), in May 2024 to deliberate on key issues related to non-fungible tokens (NFTs) and the approval of spot bitcoin exchange-traded funds (ETFs), according to a report from South Korean news outlet Edaily.
Currently, South Korea does not classify NFTs as “virtual assets,” citing their minimal influence on financial markets compared to cryptocurrencies. However, with the increasing speculative activity surrounding NFTs alongside the surge in major cryptocurrencies’ value, Governor Lee aims to explore whether NFTs should be legally classified as virtual assets. Such a classification would likely subject NFT issuers and distributors to stringent regulatory requirements, similar to those imposed on local crypto service providers.
The discussion is also expected to address the approval of spot bitcoin ETFs in South Korea. Despite existing restrictions prohibiting local institutions from launching crypto-related products and brokering overseas-based spot bitcoin ETFs, both ruling and opposition political parties have announced plans to introduce local spot bitcoin ETFs ahead of the general election on April 10. This development has heightened anticipation among local investors.
Furthermore, South Korea’s regulatory framework, designed to protect crypto investors, is poised to undergo significant changes. The first half, slated to take effect in July, focuses on investor protection, while the second half, currently in development, aims to standardize crypto token issuance and enhance information disclosure practices.
The upcoming discussion between Governor Lee and Chair Gensler highlights the international importance of regulatory talks on digital assets. It showcases a joint commitment to tackle emerging challenges and explore opportunities in the dynamic cryptocurrency environment.