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The head of South Korea's Financial Supervisory Service, Governor Lee Bok-hyun, is scheduled to discuss key regulatory issues with US SEC Chairman Gary Gensler in May.
He diary includes potentially classifying non-fungible tokens (NFTs) as virtual assets and approving spot bitcoin exchange-traded funds (ETFs) in South Korea.
Unlike cryptocurrencies, South Korea does not recognize NFTs as virtual assets due to their perceived minimal impact on financial markets.
South Korea's stance may change as speculative activities around NFTs increase, aligning with the rising value of major cryptocurrencies. The reclassification of NFTs as virtual assets could expand regulatory oversight to their issuers and distributors, imposing strict requirements similar to those faced by local cryptocurrency service providers.
In September 2021, the application of new regulatory standards led to the closure of 34 crypto exchanges; more than half of the country's platforms could not meet the criteria.
The discussion between Lee and Gensler will cover the possible approval of spot bitcoin (btc) ETFs in South Korea, where current regulations prevent local institutions from launching or trading foreign-based crypto products.
Despite the restrictions, South Korea's major political parties have pledged to advocate for the launch of local bitcoin ETFs ahead of the April 10 general election, raising investor anticipation.
South Korea is also moving forward with its cryptocurrency regulatory framework, aimed at investor protection and standardization of crypto token issuance and information disclosure. The first half of this framework is expected to be implemented in July, and further progress is underway.