South Korea stands firm on crypto ETF ban, unaffected by U.S. approval
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Although the United States gave the green light to a Bitcoin spot ETF, South Korea’s stance on cryptocurrency ETFs remains unchanged.
The South Korean government continues to ban the launch of cryptocurrency ETFs, adhering to its long-standing policy of not recognizing digital currencies as financial assets. Financial institutions in the country have been banned from investing in cryptocurrencies since 2017.
Local source According to reports, South Korea’s Financial Services Commission (FSC) reaffirmed the government’s commitment to financial market stability and investor protection. FSC officials emphasized that there is currently no review of changes to the government’s policy on virtual asset investments by financial institutions.
This position was solidified on December 13, 2017, when the government introduced emergency measures regarding virtual currencies. These measures prohibit financial institutions from holding, purchasing, using as collateral or investing in virtual assets.
Although other countries such as China, Germany and Canada also operate spot ETFs, and the United States also allows futures ETFs, South Korea believes that the SEC’s limited approval of spot ETFs is not enough to influence its domestic policies. Korean law, especially Article 4 of the Capital Markets Act, stipulates that only financial investment products, currencies and general commodities can be used as underlying assets of ETFs, excluding cryptocurrencies.
South Korea’s Financial Services Authority (FSA) is cautious about amending the law to include virtual assets as underlying assets in ETFs.in the most recent interview An FSA official told local media that the SEC’s limited approval of virtual asset ETFs was a reluctant move following the court ruling, warning that allowing cryptocurrency investments could weaken domestic stock market fundamentals.
