South Korea Bars Domestic Securities Firms from Offering Spot Bitcoin ETFs Overseas
South Korea’s Financial Services Commission (FSC) has announced that domestic securities firms are prohibited from providing spot Bitcoin exchange-traded funds (ETFs) in international markets. The FSC stated that offering such ETFs abroad may go against the government’s current stance on virtual assets. However, the regulator did mention the potential for a review of its cryptocurrency regulations in the future, although no specifics were provided.
Impact on Local Securities Firms
Following these restrictions, Korean securities firms like Mirae Asset Securities and Samsung Securities have suspended transactions for clients in Canada and Germany involving spot Bitcoin ETFs. For example, Mirae Asset Securities ceased trading its Purpose Bitcoin ETF, which had been freely traded on the Canadian stock exchange since February 2021.
South Korea’s Stance on Cryptocurrencies
In 2017, South Korea implemented emergency measures that banned financial institutions from holding, purchasing, using as collateral, or investing in cryptocurrencies. The government has not made any changes to this policy despite the recent approval of spot Bitcoin ETFs by the US Securities and Exchange Commission (SEC).
SEC Approval and Words of Caution
The SEC recently granted approval for multiple spot Bitcoin ETFs to be listed on registered national exchanges in the US. However, SEC Chair Gary Gensler clarified that this approval does not indicate an endorsement of Bitcoin and emphasized the need for caution due to the risks associated with cryptocurrencies.
Hot Take: South Korea Takes a Firm Stand Against Spot Bitcoin ETFs Overseas
South Korea’s financial regulator is maintaining its strict position on spot Bitcoin exchange-traded funds (ETFs) offered by domestic securities firms in international markets. While other countries, like the US, have given the green light to these ETFs, South Korea remains steadfast in its ban on financial institutions’ involvement in cryptocurrencies. This decision has led to Korean securities firms suspending transactions for clients in certain countries. However, there is a possibility that South Korea may review its cryptocurrency regulations in the future. As the global landscape of cryptocurrency regulation continues to evolve, it is essential for investors to exercise caution and be aware of the risks associated with this volatile asset class.
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