South Korea Maintains Firm Stance on Crypto ETF Ban
Despite the approval of Spot Bitcoin ETFs in the United States, South Korea’s Financial Services Commission (FSC) remains opposed to Crypto ETFs. The FSC officials have stated that the U.S. developments will not have any impact on their regulatory landscape and that the ban on financial institutions from investing in crypto will not be eased.
Concerns Over Illicit Activities and Speculative Losses
The FSC has expressed ongoing concerns about illicit fund outflows, money laundering, and potential speculative losses. These factors have influenced their decision to uphold the ban on crypto investments by financial institutions. The FSC aims to prevent the advent of Crypto ETFs in the country.
Reluctant Approval by U.S. SEC
An FSC official pointed out that even the U.S. Securities and Exchange Commission (SEC) approved Spot Bitcoin ETF proposals reluctantly. The official cited a South Korean news report, stating that the SEC allowed virtual asset ETFs on a limited basis in response to a court decision.
Inclusivity and Responsible Practices
The FSC has actively sought public feedback to promote inclusivity in decision-making regarding crypto regulations. They are currently reviewing the collected input, which will shape their approach to crypto. The FSC has also introduced proposals aimed at reinforcing responsible practices and safeguarding users, including a ban on credit card usage for purchasing digital currencies.
Stringent Rules for Cryptocurrency Exchanges
The FSC has advocated for stringent rules for cryptocurrency exchanges, such as storing 80% of customer deposits in cold wallets and imposing fees on customer withdrawals to encourage financial prudence.
U.S. Mirrored South Korea’s Approach
The U.S. has implemented crypto regulatory plans similar to those in South Korea, aiming to establish transparent rules for cryptocurrencies. A South Korean official believes that the U.S. move reflects their cautious approach and highlights concerns about the impact of officially recognizing crypto investments on the domestic stock market demand.
Hot Take: South Korea Remains Resolute in Crypto ETF Ban
South Korea’s Financial Services Commission continues to maintain a firm stance on the ban of Crypto ETFs, despite their approval in the United States. The FSC remains concerned about illicit activities and speculative losses associated with cryptocurrencies. They are actively seeking public feedback and have introduced proposals to reinforce responsible practices in the crypto industry. The FSC’s stringent rules for cryptocurrency exchanges indicate their commitment to safeguarding users. While the U.S. has implemented similar regulatory plans, South Korea sees their cautious approach as necessary to protect the domestic stock market demand. Overall, South Korea’s position on Crypto ETFs remains unchanged.
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