The Reaction of Korean Regulators to Spot Bitcoin ETF Approval
The approval of spot bitcoin ETFs in the U.S. has impressed investors and prominent figures, but Korean regulators have a different view. According to the country’s Financial Services Commission, the ETF approval is not a major event for them, leading to their decision to ban cryptocurrencies.
The Reason Behind Ban on Selling and Buying Crypto
Korean regulators are against illegal outflows of domestic funds, money laundering, and the encouragement of speculative behavior, which may result in losses for investors. The prohibition on crypto is a response to these concerns, and the FSC aims to get feedback for the ban until February 13, which will be reviewed in the first half of 2024.
Proposed Rules for Crypto Industry
The Financial Services Commission has proposed a ban on the use of credit cards to purchase digital currencies. Additionally, they have proposed rules to protect users of cryptocurrency exchanges, including requiring exchanges to store at least 80% of their customers’ deposits in cold wallets and charging fees to customers who withdraw funds from their deposits. These measures aim to safeguard investors and encourage responsible practices within the crypto industry.
Hot Take: Korean Regulators Perceive Spot Bitcoin ETF Approval Differently
While the approval of spot bitcoin ETFs has been celebrated by U.S. investors, Korean regulators have expressed a different perspective. Their decision to ban cryptocurrencies is based on the need to prevent illegal outflows of funds, money laundering, and speculative behavior. The proposed ban on credit card purchases of digital currencies and rules for exchanges are part of the effort to regulate and protect crypto investors in Korea, reflecting the cautious approach of the country’s Financial Services Commission.
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