The crypto industry has expressed concerns as regulatory scrutiny continues to intensify. In today’s news, South Korean financial authorities disclosed plans to examine cryptocurrency staking services in the region.
South Korea Follows Suit With SEC Crypto Staking Regulations
This regulation implementation comes shortly after the crypto exchange Kraken’s case with the U.S. Securities Exchange Commission (SEC), whereby the U.S. regulator cracked down on the company’s staking program accusing the exchange of violating securities law.
The South Korean regulator’s latest move to examine staking services seems to be an aftermath of last week’s SEC crackdown on digital assets. According to the SEC, these services and products are considered unregistered securities.
Meanwhile, the Korean regulator has yet to give further details on the timeline and methods of the staking services examination. However, the move is said to affect some legislative decisions.
Unlike the SEC, which targeted a specific cryptocurrency exchange that issued the staking services, the Korean regulator is more focused on the national staking services.
SEC Crackdown Over The Past Week
Over the past week, the SEC has been rampaging against big digital asset industry players. Last week, the regulator pounded on U.S. cryptocurrency exchange Kraken charging two subsidiaries, Payward Ventures Inc and Payward Trading Ltd, over the failure to register its staking-as-a-service program.
Following this, Kraken agreed to cease the staking program operation immediately and settle the SEC with a $30 million fine for disgorgement, prejudgment interest, and civil penalties. A week after, the SEC targeted the industry’s second largest stablecoin, BUSD, the Binance branded asset.
On Monday, the SEC issued Paxos — BUSD issuer— a Wells Notice for selling and listing unregistered security, which the regulator BUSD and other assets fit with this concept. This resulted in the stablecoin issuer having to halt the distribution of BUSD and depeged the stablecoin for a while in the early hours of Monday.
This news has caused a shake in the stablecoin market, especially in the dollar-backed sector, as investors sought a new alternative for being less exposed to the volatile cryptocurrency market. According to Binance’s CEO, the industry could see the emergence of other assets and even algorithmic-backed stablecoin.
In a Twitter Space Q&A on Tuesday, CZ said:
The amount of pressure put on stablecoins is quite significant. Multiple agencies are applying pressure there. That will shrink the USD stablecoin market, so the industry is exploring its options.
While the SEC continues to clamp down on various firms and services in the industry, the market has shown little reaction to the news. Over the past few days, the global cryptocurrency market capitalization still sits above the $1 trillion mark.
At the time of writing, the global cryptocurrency market cap is valued at $1.106 trillion, up by 2.7% in the last 24 hours.