On Wednesday, local South Korean media reported that the financial authorities are looking into the staking services market. However, an anonymous official briefed the media that the fears of the crypto community about the possible repercussions of the recent court deal between the United States Securities and Exchange Commission (SEC) and Kraken are starting to materialize.
Following the American counterparts, South Korean regulators intend to examine the crypto-staking operators in the country.
The position is that there is nothing to be a problem because nothing has been done.
Sources reveal that, as of now, no details regarding the timeline and methods of the examination were provided, but it could affect some legislative decisions. In contrast to more common operations with digital assets, crypto staking isn’t defined by South Korea.
On February 9, global crypto-staking discussions started from a settlement between the SEC and the Kraken crypto exchange. The firm agreed to pay a $30 million fine and halt its staking program. However, the move was widely criticized by the American crypto community and even the SEC’s acting commissioner.
In February, South Korea’s Financial Services Commission established guidance that specifies which types of digital assets will be considered and regulated as securities in the country. The law considers securities as financial investments where investors are not required to make additional payments after their original investment.
South Korean regulators in recent times have been cautious of the crypto exchanges operating in the country. In December, the authorities even dropped the exchanges, which were an integral part of its local exchange establishment plan. The five exchanges were FTX, Huobi Global, Crypto.com, Binance, and Gate.io.
In November, Todayq News reported that the authorities in South Korea were submitting additional revisions to the Digital Assets Bill to gain more control over cryptocurrency exchanges in the wake of the collapse of Terra LUNA and the bankruptcy of FTX. To prevent situations like the FTX collapse from happening again, Congressman Yoon Chang-Hyun was drafting an amendment to increase the authority of financial authorities in their hands.
Notably, several hedge funds and exchanges became overexposed due to TerraUSD losing its U.S. dollar peg in May last year, with effects felt across the industry. A few South Korean Luna (LUNA) shareholders filed a complaint against Terraform Labs, and co-founder Do Kwon in the same month, accusing them of scamming investors and breaking regional securities rules.