• South Korean Financial Supervisory Service (FSS) is conducting an investigation into domestic crypto staking services.
• At least three of the nation’s four biggest exchanges – Upbit, Bithumb, Korbit, and Coinone – have been contacted by the FSS regarding staking.
• The FSS has suggested that an outright ban on domestic staking is not currently being considered.
South Korean Regulator Investigating Crypto Staking Services
The top South Korean financial regulator, the Financial Supervisory Service (FSS), has launched a probe into domestic crypto staking services. This has raised concerns among crypto exchanges that new regulations could be incoming.
Exchanges Contacted By FSS Regarding Staking
At least three of the country’s four biggest exchanges – Upbit, Bithumb, Korbit, and Coinone – have confirmed that they had been contacted by the FSS recently in relation to their staking operations. An unnamed official at one of the exchanges said that they had received a request for data related to its staking services from the FSS. An employee at another exchange also reported having sent relevant data to the FSS.
Outright Ban On Domestic Staking Not Currently Being Considered
The FSS has not commented on whether or not staking regulations would be forthcoming but did suggest that an outright ban on domestic staking was not currently being considered. This follows recent legal action taken by United States regulators against some cryptoasset providers which sparked speculation about similar punishments in South Korea.
SEC Case Against Terraform Labs Viewed As Positive Development
This week prosecutors in South Korea viewed a Securities Exchange Commission (SEC) filing against Terraform Labs and its CEO Do Kwon as a “positive development” as it relates to securities violations with regards to cryptocurrency assets.
It remains unclear whether new regulations will be introduced for cryptoasset providers in South Korea but this latest investigation by the Financial Supervisory Service suggests further developments may be imminent with regards to how such activities are legally construed going forward.