About 90% of the numerous virtual assets are classified as “securities-type coins,” which is expected to be delisted on the Korean exchange.
The risk of delisting 90% of coins in circulation in Korea is becoming a reality
According to sources, Korea’s Financial Services Commission is pushing to divide virtual currencies into “securities type” and “non-securities type” and treat them as targets of the Capital Markets Act in the case of “non-securities type.” In this case, these coins will be treated as securities and will no longer be available on domestic cryptocurrency exchanges. https://bybitnote.com/
In fact, if this happens, about 90% of the coins listed on the domestic exchange will be delisted.
In fact, President Yoon Suk Yeol made this pledge as a national agenda when he was a candidate.
Securitization of cryptocurrency is
The tedious legal battle that Ripple (XRP) has been having with the U.S. Securities and Exchange Commission (SEC) for years is also a debate over this.
The key issue in the legal battle between the U.S. Securities and Exchange Commission and Ripple’s developer Ripple Labs is the SEC’s claim that senior figures at Ripple issuers have sold unregistered securities to individual investors over the past seven years.
As a result, the SEC asked Riflabs to return its previous unfair gains and not to recruit any more investors. In addition, we have filed a civil liability claim with the court.
The reasons why the U.S. Securities and Exchange Commission (SEC) sees Ripple as a securities are as follows.
First, we cited the fact that the degree of success of investors buying Ripple (XRP) is the same for all investors as evidence that Ripple has securitization. The fact that all investors who own ripple benefit together when the price of ripple rises means that ripple holders have a “common interest” as if they were stockholders.
The second is the success of Ripple’s issuer, Ripple Labs, which has a big impact on investors buying Ripple (XRP). Since recruiting early Ripple investors, Ripple has shown that it will do its best to keep the value of Ripple up and down, allowing investors to think that the success of the various projects Ripple plans and executes determines the price of Ripple (XRP).
Thirdly, the SEC did not accept the claim that Ripple (XRP) can be used in real life, as Ripple Labs claims, and that it functions as a currency. Ripple believes that it is only an object of investment, and that it is difficult to find evidence that it was used in real life, and that it does not apply to currency such as legal currency.
Fourth, the fact that Ripple Labs was already aware that such Ripple’s securities could be a problem also contributed to the SEC’s judgment that Ripple was a securities.
Ripple Labs has already received legal advice 10 years ago that Ripple is equivalent to securities under the Federal Securities Act, but it ignored it and continued to recruit investors. If it is a securities, it can be said that it has ignored all the various information disclosure obligations to receive and has only taken profits.
It is clear that the U.S. Securities and Exchange Commission views Ripple as a securities.
Opinions are still divided on how the results of the ripple lawsuit will come out in the future. The legal community predicts that a conclusion will be reached at least sometime in 2023.
The impact on coins on Korea’s exchange is
It is 100% certain that the U.S. Securities and Exchange Commission’s criteria for judging coin securities will have a significant impact on the Financial Services Commission’s judgment on securities.
This is because most of Korea’s norms, especially in the financial sector, are formed based on those on the Anglo-American side.
However, since the U.S. Federal Securities-related laws and Korean financial-related laws are not the same, there is a possibility that the judgment on securities characteristics may be different.
If domestic virtual asset exchanges classify coins currently in circulation as securities and non-securities as promised by President Yoon Seok-yeol, more than 90% of the above arguments are likely to be classified as securities. In this case, it is subject to regulations under the Securities Act, so it can no longer be handled on the virtual asset exchange and must be handled on the Korea Exchange.
If a coin is classified as a securities type, it will be subject to various regulations such as approval and registration procedures with the Financial Services Commission, investment recommendations will be banned, and the obligation to submit securities reports and keep investment manuals. In addition, conflicts of interest with investors, such as self-transaction bans and bilateral agency bans, will be prohibited.
In the extreme, an expert in the U.S. even said, “Among many coins, only two can be classified as non-securities coins are Bitcoin and Ethereum.”
If this becomes a reality, I think that most exchanges will be uncertain about their survival beyond the worsening profitability of most domestic exchanges.
It feels like the typhoon that Korean Kwon Do-hyung recently brought to the global virtual currency market as well as the financial market is returning to a huge paradigm of strengthening regulations on the entire virtual currency.
For the time being, we hope you will be more careful about spot purchases and long positions, and it would be good to think about profits through short positions.
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Today, we looked at the facts that may be the biggest nuclear bomb-like news since the domestic virtual asset market became so huge.
I hope this doesn’t happen.
