South Korea: Digital assets can be subjected to securities law
The Korea Financial Supervisory Authority (FSS) implied that some digital currencies may be considered as securities according to the laws and regulations of the host country. Lee Bok hyun, Mayor of FSS, revealed her views to relevant news media when answering questions about the collapse of Terra Luna.
"I object to the statement that some virtual properties are not considered as part of investment and wealth management products or securities," Lee from the headquarters of the Financial Information Service Bureau told reporters. "As a lawyer or a person who undertakes accounting affairs, there is a choice. If certain regulations are met, it can be determined as securities."
Lee affirmed that the prosecution has the right to try to determine whether digital currency can be classified as security. He added that this right does not lie with the regulators, but we should be cautious when making such distinctions on virtual currencies.
Previously, the prosecutor regarded Terra's stablecoin and local virtual property as a kind of security. The law enforcement agencies of the host country then carried out laws and regulations against Do Kwon, the founder of Terra, who was recently issued an arrest warrant by the prosecutor company office in South Seoul, South Korea. Earlier this week, there were several reports that the South Korean Foreign Ministry would announce that its South Korean passport was invalid because of the increased arrest of Quan.
Although Korea has demonstrated its leadership role in the selection of blockchain technologies and has been appointed as the President of the United States for the application of digital currency, the enthusiasm of investors has been curbed since the regulators strengthened the investigation and analysis of the importance of the trading center in Terra.
Regulators expect virtual property to be treated as securities
Regulators have urged due process to regard virtual currency as a security issue with global characteristics. Perhaps the United States is a jurisdiction where the call has been amplified in recent months.
The Securities Trading Association (SEC) led by Gary Gensler fabricated a lie. According to Hoey's test, some virtual currencies were subject to the Securities Act of 1934.
In the case of SEC v. W.J. Howey, when the Supreme People's Court confirmed whether a project investment could be guaranteed by loans, there were four aspects. Those factors include whether the project investment is carried out in a joint enterprise and the hope of making profits according to the diligence of others.
When using Howey test, SEC felt that Ripple Labs sold unregistered securities (XRP tokens), and sued the enterprise to the court in December 2020. In recent years, investors have little understanding of the status of virtual currency at the level of securities law.