As reported by a local publication on February 15, Korean financial authorities are looking into the staking service market. However, as an unnamed official told reporters:
Fears from the crypto community about the possible consequences of the new court settlement between the United States Securities and Exchange Commission (SEC) and Kraken are starting to materialize. After its American counterpart, South Korean regulators intend to inspect crypto-staking operators in the country.
“The position doesn’t matter because nothing is being done.”
No details on the timeline and method of the examination were given, but it could affect some legislative decisions. Unlike more common operations with digital assets, crypto staking is not defined by current Korean regulations.
The global discussion on crypto staking started with the February 9 settlement between the SEC and crypto exchange Kraken. Kraken agreed to pay a $30 million fine and end its staking program. This move was widely criticized by the American crypto community and even the acting commissioner of the SEC.
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In an analysis for Cointelegraph, JW Verret, associate professor at George Mason Law School, warned of the SEC’s intention to use Kraken’s playbook against staking protocols in general:
“It’s becoming clear from the pattern between financial regulators and the White House that the subtext in the administration’s policy toward crypto is that it should be thrown out.”
In February, South Korea’s Financial Services Commission established guidelines that define the types of digital assets that will be considered and regulated as securities in the country. The law considers securities as financial investments where investors are not required to make additional payments after the original investment.