On February 15, a local publication reported that Korean financial authorities are currently investigating the staking services market. This comes after an unnamed official stated that South Korean regulators are examining crypto staking operators in the country, similar to their American counterparts. The fear amongst the crypto community of possible repercussions following the recent court deal between the United States Securities and Exchange Commission (SEC) and Kraken seems to be materializing.
However, the same official also stated that there is nothing to be alarmed about as nothing has been done. The exact timeline and methods of the examination have not been disclosed, but it could potentially affect legislative decisions. Presently, crypto staking is not defined by Korean regulation, unlike more common operations with digital assets.
The global discussion on crypto staking began with a settlement on February 9th between the SEC and Kraken crypto exchange. Kraken was required to pay a $30 million fine and discontinue its staking program, which received backlash from both the American crypto community and the SEC’s acting commissioner.
J.W. Verret, an associate professor at the George Mason Law School, shared his analysis on the SEC’s intent to use its Kraken playbook against staking protocols in general. He warned that it is becoming clear from a pattern across financial regulators and the White House that the subtext in the administration’s policy towards crypto is to stifle it.
In February, South Korea’s Financial Services Commission established guidance that specifies which types of digital assets will be regarded 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.
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