South Korea has recently made a bold move by banning the launch of exchange-traded funds (ETFs) that track companies associated with digital assets, such as Coinbase. This decision, rooted in a 2017 government directive, follows a larger ban on Bitcoin (BTC) spot and futures ETFs due to the South Korean Capital Markets Act.
The Financial Supervisory Service (FSS) in South Korea has taken a strict stance on crypto-related investments, causing local asset managers to put their plans on hold. Despite the growing demand for Bitcoin investments in South Korea, the FSS remains firm in its regulatory policies.
However, there may be a glimmer of hope for crypto investors in South Korea. The Financial Services Commission (FSC) is set to establish a Virtual Asset Committee to oversee the approval of spot crypto ETFs. This committee, led by FSC Vice Chairman Soyoung Kim, aims to guide the crypto industry and address issues such as the authorization of corporate accounts for crypto investing.
South Korea has emerged as a key player in the global crypto market, with a significant transaction value between 2023 and 2024. The country’s interest in cryptocurrencies is driven by a lack of trust in traditional financial systems and efforts from major companies like Samsung to promote crypto adoption.
Despite the regulatory challenges faced by asset managers in South Korea, the potential for growth and innovation in the crypto industry remains promising. As the country continues to navigate the evolving landscape of digital assets, investors and industry players alike are hopeful for a more conducive regulatory environment in the future.
