“Although he admitted to helping local prosecutors classify Terra LUNA tokens as securities,” South Korea’s Financial Supervisory Service (FSS) governor Lee Bok-Hyun disagrees with the notion that cryptocurrencies are not considered financial investment products or securities, according to local media reports can become .
At a news conference on Thursday, Lee stated, “As a person in the legal and financial services space, the ruling is that under certain circumstances [crypto] can be considered securities.”
Lee explained that prosecutors also have the power to determine if a person is safe, making it clear that that power isn’t unique to tax authorities.
On Wednesday, South Korean prosecutors issued an arrest warrant for Do Kwon, a co-founder of Terra, and five other related companies investigating the collapse of Terra-LUNA on suspicion of violating the capital markets law.
This happened because the now-defunct stablecoin and Terra’s sibling cryptocurrency were considered securities by prosecutors.
Yoon Suk-yeol, the President of South Korea, stated earlier this year that his government would regulate cryptocurrency in two ways: for tokens similar to securities and for non-securities.
While utility tokens and non-security tokens will be subject to a new cryptocurrency law, the government intends to regulate security-like tokens under the existing capital markets law.
While the industry is being regulated, South Korea is entering the Web3 market.
According to a recent article by Be[In]Crypto, lawmakers in South Korea’s ruling party, are developing legislation to boost 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 ranging from 10% to 50%.
As new entrants enter the cryptocurrency and metaverse sectors, South Korea is seeing legislative changes.
Yoon Suk-yeol, then-President of South Korea, expressed his intention to lift the country’s ban on initial coin offerings (ICOs) earlier in the year, which led to the ensuing wave of reforms.
The Bank of Korea also released a local paper on the “European Union Crypto Asset Market Act (MiCA)” on Aug. 29, urging the legalization of ICOs in the nation.