ETFs
South Korea urged to follow US lead on crypto ETFs after ETH Nod
Last updated: May 27, 2024 03:21 EDT | 2 minutes of reading
The United States Securities and Exchange Commission Ethereum spot ETF approval last week sparked pressure on South Korean financial regulators to greenlight similar crypto exchange-traded funds.
The approval of Ethereum ETFs last week marked a dramatic reversal for the US market. Until then, most market participants expected a rejection of these ETFs, at least in May.
The Korea Times reported On Monday, the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) are reluctant to allow trading of crypto assets in the traditional securities market.
The FSC cited the Capital Markets Act to justify its skepticism towards crypto ETFs. The law restricts ETFs to the underlying assets, which are traditionally real financial assets or securities like international currencies or commodities.
Jung Eui-jung, head of the Korean Shareholders Alliance, reportedly called on authorities to follow the United States and approve ETFs for Bitcoin and Ethereum. He believes this step is crucial to prevent investors, both in traditional finance and digital assets, from leaving Korea.
“Who would want to invest their money in a market that is lagging behind the rapidly changing regulatory landscape? » said Jung.
South Korean financial watchdog blocks crypto ETFs
South Korean crypto investors currently do not have the option to trade Bitcoin and Ethereum spot ETFs. Additionally, financial authorities in January ended any hopes of regulations allowing the sale of Bitcoin futures ETFs in the near future.
In March, Lee Bok-hyun, governor of the Financial Supervisory Service, acknowledged the internal debate around virtual assets. Although he personally has a positive view, others within the agency are more cautious, he said. Lee stressed the importance of considering all points of view and having open discussions before moving forward.
“Among the authorities, I am one of those who are positive about virtual assets, while there are others who are wary, and we must also hear their opinions. We are discussing it internally,” he said.
Korean parties compete for crypto voters
In a surprising turn of events, South Korea’s robust cryptocurrency market has become a central theme ahead of the country’s legislative elections in April. Both major political parties saw a opportunity to seduce voters with cryptocentric promises.
President Yoon Suk Yeol’s People Power Party has acknowledged the growing influence of the crypto industry and vowed to delay the implementation of a tax on digital assets, a move likely to resonate among crypto investors.
In contrast, the opposition Democratic Party has focused on easing restrictions on ETFs, including those that would allow investment in U.S. Bitcoin products. This strategy aimed to attract voters looking for easier access to cryptocurrency investments.