South Korean Government Requires New Crypto Rules for Bitcoin ETF Approval
The head of the Financial Supervisory Service (FSS) in South Korea has stated that no Bitcoin exchange-traded fund (ETF) will be approved unless new crypto regulations are introduced. While the FSS chief, Lee Bok-hyun, expressed optimism about potential approval for a Bitcoin spot ETF, he also emphasized the need for caution. Lee explained that regulators must have a system in place to manage and operate virtual assets before approving a BTC spot ETF market in South Korea. The pressure to approve Bitcoin ETFs is due to a move by regulators in Washington in January.
Regulatory Conditions Must Be Met Before Bitcoin ETF Approval
Lee acknowledged that he is positive about virtual assets, but there are other regulators who are more cautious. He stated that certain regulatory conditions must be met before approving a Bitcoin spot ETF. Lee emphasized the need for a system that allows regulators to manage and operate virtual assets before opening the BTC spot ETF market in South Korea. This suggests that without new regulations, no Bitcoin ETF will gain approval in the country.
Potential Crypto Regulatory Overhaul After Legislative Elections
Anonymous financial investment industry officials have suggested that a major “overhaul” of crypto law may follow the upcoming legislative elections in South Korea. However, the nature of this legislative change may depend on the makeup of the single-chamber parliament. President Yoon Seok-yeol’s pre-election promises included pro-crypto industry pledges, but he has yet to deliver on many of them. Lee highlighted that regulators are currently constrained by the existing legal system when it comes to approving Bitcoin ETFs.
Efforts to Address Altcoin Price Manipulation Through Regulations
Lee also mentioned that future crypto regulations could focus on combating altcoin price manipulation. Recent years have seen several high-profile court cases related to altcoin manipulation, including allegations against smaller exchanges and major exchanges like Bithumb. Ongoing trials involving Terra have also garnered public attention. Lee emphasized the need for an institutional mechanism to prevent price manipulation, theft, and hacking in the crypto industry. He suggested that once trust in virtual assets is established and such mechanisms are in place, the second round of legislation related to virtual assets can be discussed.
New Crypto Regulation Expected After Elections
Lee concluded that the responsibility of creating new crypto regulation lies with the next National Assembly, which will be formed after the legislative elections. This implies that the FSS will not make any further attempts to regulate the crypto sector or approve crypto ETFs until late April at the earliest.
Hot Take: South Korean Government’s Stance on Bitcoin ETF Approval
The South Korean government’s stance on Bitcoin ETF approval is clear: without new crypto regulations, no Bitcoin ETF will gain approval in the country. The head of the Financial Supervisory Service emphasized the need for a system to manage and operate virtual assets before opening the BTC spot ETF market. While there is optimism about potential approval, caution is also advised. The upcoming legislative elections could bring about a regulatory overhaul, but it remains to be seen how this will affect the crypto industry. Efforts to combat altcoin price manipulation are also expected through future regulations. The responsibility of creating new crypto regulation lies with the post-election National Assembly. Overall, it seems that South Korea is taking a cautious approach to approving Bitcoin ETFs and implementing comprehensive crypto regulations.
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