South Korea, reeling from a $40 billion crypto crash in 2022, is gearing up for crucial talks on crypto regulation. The Financial Supervisory Service is set to meet with Gary Gensler.
- The $40 billion crash in South Korea’s crypto market in 2022 underscores the need for regulatory measures in the largely unregulated crypto space.
- Ongoing regulatory developments, including potential SEC approval of spot Bitcoin exchange-traded products and anticipated regulatory changes in South Korea in July 2024, prompt the need for high-level discussions.
- Legal challenges faced by Do Kwon, co-founder of Terraform Labs, across multiple countries and the possibility of extradition to the U.S.
- South Korean analysts foresee 2024 as a pivotal year for crypto, anticipating greater institutionalization and a positive shift in industry reorganization and refinement.
South Korea’s Urgency for Regulation
South Korea’s crypto market suffered a significant setback in 2022, experiencing a $40 billion crash due to fraud and collapse within Do Kwon’s Terra-Luna ecosystem.
— Coinpedia (@CoinpediaNews) December 21, 2023
This incident highlighted the vulnerabilities of an unregulated crypto space, prompting the need for regulatory measures to protect investors and stabilize the market.
Regulatory Developments in Both Nations
In response to the challenges faced, South Korea’s Financial Supervisory Service (FSS) Chief, Lee Bok-hyun, is set to engage in a critical discussion with Gary Gensler, Chair of the U.S. Securities and Exchange Commission (SEC), in January 2024.
This meeting gains importance against the backdrop of ongoing regulatory changes in both countries. Speculations about the SEC’s potential approval of spot Bitcoin exchange-traded products and South Korea’s anticipated regulatory adjustments in July 2024 intensify the urgency for such high-level dialogues.
KuCoin Data and International Legal Complexities
Data from KuCoin reveals that around 25% of South Korean adults between 18 and 60 participated in cryptocurrency investments within six months, solidifying the country’s position as a major player in the global crypto trading sphere.
While the SEC has approved ETFs linked to crypto futures, decisions on spot crypto ETFs for major cryptocurrencies like Bitcoin and Ether remain pending.
Against the backdrop of new rules and discussions around ETFs, South Korean analysts foresee 2024 as a pivotal year for crypto. They anticipate greater institutionalization, considering it a positive shift that will enable industry reorganization and refinement.