South Korea and U.S. Leaders Gear Up for Critical Crypto Regulation Talks in 2024

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South Korea’s crypto market faced a severe blow when fraud and collapse within Do Kwon’s Terra-Luna ecosystem led to a staggering $40 billion crash in 2022. This incident highlighted the need for regulation in the largely unregulated crypto space, leaving South Korean traders reeling from the aftermath of rampant fraud. 

Regulatory Talks: South Korea’s Financial Chief to Meet SEC’s Gensler

South Korea’s Financial Supervisory Service (FSS) Chief, Lee Bok-hyun, is scheduled for a critical discussion in January with Gary Gensler, Chair of the U.S. Securities and Exchange Commission (SEC). This anticipated meeting, reported by Chosunbiz on December 18, signifies a proactive move to deliberate on cryptocurrency market dynamics and potential supervisory policies in the ever-evolving crypto sector.

The timing of this upcoming meeting holds paramount significance, particularly against the backdrop of ongoing regulatory developments in both nations. Speculations abound about the SEC’s imminent approval of several spot Bitcoin exchange-traded products. Meanwhile, in South Korea, regulatory changes are expected in July 2024, impacting crypto investors and exchange practices. This regulatory evolution emphasizes the urgency for such high-level dialogues. 

KuCoin data revealed that roughly 25% of South Korean adults between 18 and 60 participated in cryptocurrency investments within six months, solidifying the country’s position as a major player in the crypto trading sphere. Meanwhile, South Korean crypto market analysts anticipate the global crypto market cap could reach $5 trillion in 2024, foreseeing continued global adoption in the crypto sphere.

Adding to the complexity is the case involving Do Kwon, co-founder of Terraform Labs, entangled in legal challenges across multiple countries, including the possibility of extradition to the U.S. This intricate scenario reflects the intersection between international law and the decentralized nature of cryptocurrencies.

Under Gary Gensler’s leadership, the SEC has taken a cautious stance towards the crypto market. Despite anticipation, the SEC has only approved ETFs linked to crypto futures, leaving decisions pending on spot crypto ETFs for major cryptocurrencies like Bitcoin and Ether. The impending discussion between Lee and Gensler holds the potential to shed light on future regulatory approaches in this domain. 

South Korean Analysts say 2024 is a Big Year for Crypto 

In the backdrop of these new rules and buzz around ETFs. South Korean researchers foresee 2024 as a year of greater institutionalization in the crypto market, deeming it a positive shift that will enable industry reorganization and refinement. The extended bear market and a sluggish 2023 have adversely impacted South Korea’s crypto exchange landscape, witnessing decreased transaction volumes and reduced exchange competitiveness.

Despite a recent surge in crypto activity, trading volumes in 2023 dipped. The dominant exchange, Upbit, held over 90% of the market share in June, prompting other exchanges like Korbit to eliminate commission fees indefinitely, their primary revenue source.