“Despite admitting he helped local prosecutors classify Terra-LUNA tokens as securities”, South Korea’s Financial Supervisory Service (FSS) governor Lee Bok-Hyun disagrees with the idea that cryptocurrencies cannot be viewed as financial investment products or securities, according to local media reports.
At a press conference on Thursday, Lee stated, “As a person in the field of law and financial services, the judgment that under some circumstances, [crypto] can be considered as securities.”
Lee stated that prosecutors also have the authority to determine whether a subject is secure, making it clear that this authority does not belong only to the financial authorities.
On Wednesday, a warrant for Do Kwon, a co-founder of Terra, and five other affiliates was issued by South Korean prosecutors looking into the collapse of Terra-LUNA on suspicion of breaking the capital markets law.
This occurred because the now-defunct stablecoin and sibling cryptocurrency of Terra were viewed as securities by the prosecutors.
Yoon Suk-yeol, the president of South Korea, declared earlier this year that his government would regulate cryptocurrency in two ways: for tokens that resemble securities and for non-securities.
While utility tokens and non-security tokens will be governed by a new cryptocurrency law, the government intends to regulate securities-like tokens under the existing capital markets law.
While regulating the industry, South Korea enters the Web3 market.
According to a recent article from Be[In]Crypto, lawmakers of South Korea’s ruling party are developing a law to promote the metaverse industry.
The first set of metaverse ethics was then published by South Korea’s Ministry of Science and Information and Communication Technologies (ICT).
Authorities also announced last month that cryptocurrency airdrops will be subject to a gift tax in the 10% to 50% tax rate.
As new participants enter the cryptocurrency and metaverse sectors, South Korea is experiencing legislative changes.
Yoon Suk-yeol, the president of South Korea at the time, expressed his intention to lift the country’s earlier-this-year ban on initial coin offerings (ICOs), which led to the subsequent wave of reforms.
The Bank of Korea also released a local paper on the “European Union Crypto Asset Market Act (MiCA)” on August 29 in which it urged for the legalization of ICOs in the nation.