South Korea to Maintain Restrictions on Crypto ETFs
South Korea’s top financial regulator has announced that it will uphold its rule prohibiting financial institutions from launching cryptocurrency exchange-traded funds (ETFs). The country’s Financial Services Commission stated that the approval of spot bitcoin ETFs in the US would not lead to a lifting of the ban. The regulator cited concerns about financial market stability and investor protection as reasons for maintaining the current restrictions. South Korea’s capital markets act currently limits investment contract securities, such as ETFs, to traditional financial instruments and commodities, excluding cryptocurrencies.
Development of Crypto Regulations in South Korea
South Korea is in the process of developing comprehensive crypto regulations. The first part of these regulations was passed last year and is set to take effect in July 2024. The second part aims to establish clear rules regarding the issuance, listing, and delisting of cryptocurrencies. Since 2017, South Korea has not recognized cryptocurrencies as financial assets and has prohibited financial institutions from investing in them.
No Comment from the FSC
The Financial Services Commission did not provide an immediate response to inquiries from The Block regarding this matter.
About the Author
Danny Park is an East Asia reporter at The Block specializing in Web3 developments and crypto regulations in the region. He has previously worked as a journalist covering various topics related to blockchain technology and digital currencies. Danny holds a Bachelor’s degree in Journalism and Business Marketing from the University of Hong Kong.
Hot Take: South Korea Stands Firm on Crypto ETF Restrictions
South Korea’s Financial Services Commission has reaffirmed its stance on prohibiting financial institutions from launching cryptocurrency exchange-traded funds (ETFs). Despite the approval of spot bitcoin ETFs in the US, the Korean regulator maintains that it will not lift the ban. The decision is based on concerns about market stability and investor protection. South Korea continues to develop comprehensive crypto regulations, with the first part set to take effect in 2024. While cryptocurrencies are not recognized as financial assets in the country, clear rules regarding their issuance and listing are being established. The Financial Services Commission has yet to comment on the matter.
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