According to a local media report, the chairman of South Korea's Financial Supervisory Service (FSS), Lee Bok-hyun, is scheduled to meet with the chairman of the US Securities and Exchange Commission (SEC) in May, Gary Gensler, to deliberate on the classification of non-fungible tokens (nft) and the approval of Spot bitcoin Exchange Traded Funds (ETF).
The meeting holds significance as financial authorities in South Korea and the United States are considering recognizing blockchain-based digital ownership by NFTs as a virtual asset.
South Korean watchdog, US SEC to address nft classification
Non-fungible tokens, which provide unique certificates of authenticity for various digital assets such as images, videos, artwork and real estate, have gained importance in recent years in Asia. However, there is no clear legal definition for NFTs, leading to different perspectives on whether they should be classified as technology, virtual assets, or securities.
According to the reportIn Korea, NFTs were initially excluded from the scope of virtual assets in the Implementation Decree of the Virtual Assets Law, effective in July, due to their supposed “predominantly collectible” nature and perceived low market risk.
However, as the prices of virtual assets, including bitcoinhave risen, non-fungible tokens have increasingly become the subject of speculation, prompting calls for their recognition as countable assets alongside btc.
The meeting between the Financial Supervisory Service and the chairman of the US SEC is expected to address this issue, with industry stakeholders emphasizing the need to establish a clear definition of non-fungible tokens.
Concerns arise over privacy and trading costs
As the report notes, the South Korean regulator's concerns regarding the classification of NFTs primarily stem from their various use cases and the potential impact on companies operating in this field.
While some argue that NFTs should be regulated as virtual assetsothers argue that certain NFTs, such as those used exclusively in video games or as electronic versions of existing assets, should be excluded.
Furthermore, including non-fungible tokens as virtual assets would require companies to obtain a virtual asset business license, which involves significant “labor and costs,” including information security management system (ISMS) certification and audits. regulatory.
Critics argue that subjecting NFTs to virtual assets regulations could impose “excessive” restrictions on banking transactions and commercial activities, specifically affecting new businesses and small and medium-sized businesses.
Additionally, concerns have been raised about potential violations of privacy rights if the Financial Services Commission were to manage all NFTs issued in Korea, allowing full tracking of the usage history of items traded with NFTs, such as artwork, banknotes and automobiles.
The outcome of the meeting between the Financial Supervisory Service and the chairman of the SEC could influence changes to the enforcement ordinance of the Virtual Assets Act.
Finally, the report notes that industry experts speculate that the Financial Services Commission could work to include Definitions related to nft in the Act to provide greater clarity and guidance to companies operating in this space.
While the overall agenda and schedule for the SEC meeting have not been confirmed, discussions between South Korean and US regulators are expected to shape the future of non-fungible tokens and bitcoin ETFs. within the virtual asset landscape and potentially pave the way for a broader regulatory framework.
Featured image from Shutterstock, chart from TradingView.com
