"News Updates June 02, 2023"

1. Korean Financial Supervisory Authority Meets With 5 Major Crypto Exchanges. According to Etoday, the Korean Financial Supervisory Service (FSS) will have a non-public meeting today with five cryptocurrency exchanges, including Gopax, Bithumb, Upbit, Korbit, Coinone, and the Digital Asset eXchange Association (DAXA). On June 2, the Financial Supervisory Service convened a secret meeting with the Digital Asset eXchange Alliance (DAXA) and the five crypto exchanges to discuss details for establishing the securities ability of particular virtual assets.<\/p>\n

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Working-level and legal representatives for each exchange, as well as 2-3 in-house attorneys, attend the FSS, the Corporate Disclosure Bureau, and the virtual asset exchange. The Financial Supervisory Service intends to provide cautionary notes when examining virtual asset securities and to give instances of virtual asset exchanges that have evaluated securities on their own, such as Upbit and Korbit.<\/p>\n

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The Financial Supervisory Service intends to evaluate and debate the standards for attributing securities to profit and loss at the meeting. To be regarded as securities, virtual assets must go beyond reasonable expectations of investor gains and contractual rights to collect profits and losses as a consequence of joint enterprise.<\/p>\n

In February of this year, the FSS established a specific task force (TF) organization to assess the security of virtual assets. Originally, it was policy to refer to instances from other countries, such as the US Securities and Exchange Commission (SEC), but it seems that local financial authorities are catching up on their own since they are behind in covering the securities of individual virtual assets in the US.<\/p>\n

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At an April 18 hearing, SEC Chairman Gary Gensler refused to address questions regarding whether Ethereum and Ripple are securities. The SEC-Ripple litigation, which will be a key starting point for the securities judgment, is still pending.<\/p>\n

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It was earlier announced in March that South Korea’s STO-related law modifications would be presented in the first half of this year and would be implemented by the end of 2024 at the earliest. If a digital asset presently traded on a virtual asset exchange is discovered to be a security, the issuer will be sanctioned for breaching the Capital Markets Act. Authorities said that Terra and Luna are investment contract securities and charged associated individuals with breaking the Capital Markets Act.<\/p>\n

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2. Bitcoin, Ethereum Recover On Debt Ceiling Deal, US Fed Pause, Easing Jobs Market<\/p>\n

Bitcoin, Ethereum prices rally on Senate passing debt ceiling deal, US Fed pause talks, and cooling jobs market.<\/p>\n

Crypto and stock markets recover as the U.S. Senate passes the Biden-McCarthy debt ceiling deal, with President Joe Biden to sign the deal and address averting debt default and the bipartisanship budget agreement tomorrow. The global crypto market cap increased 1.31% to 1.14 trillion on Friday. Bitcoin price rallied over 2% to hit a 24-hour high of $27,203, while Ethereum price also jumped over 2% to almost $1900.<\/p>\n

The market expects the US nonfarm payrolls increased by 190,000 jobs in May, far lower than 253,000 in April. The unemployment rate is also expected to be higher in May, with consensus showing 3.5%. The ISM manufacturing data on Thursday also showed manufacturing activity contracted for the 5th consecutive month and price pressures eased significantly.<\/p>\n

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These macro factors will potentially allow the US Federal Reserve to “skip” an interest rate hike this month for the first since maintaining its hawkish approach for more than a year. Fed Governor Philip Jefferson and Philadelphia Fed President Patrick Harker suggested this week the central bank would skip a rate hike in June.<\/p>\n

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According to the CME FedWatch Tool, there’s a 70% probability of the Fed keeping its policy rate unchanged. Fed Chair Jerome Powell also hinted at a possible pause in June.<\/p>\n

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As a result of US debt ceiling deal and Fed eyeing to skip a rate hike, the benchmark treasuries and the US dollar dipped today with US Dollar Index (DXY) falling below 103.50 from a high of 104.50 this week.<\/p>\n

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