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South Korea's main financial regulator has affirmed its commitment to the current rule prohibiting financial institutions from introducing cryptocurrency exchange-traded funds (ETFs).
According to local media reports, an official from the Financial Services Commission (FSC) emphasized that the recent approval of spot bitcoin ETFs in the United States does not prompt the South Korean regulator to reconsider or lift the existing ban. The decision is grounded in the regulator's commitment to maintaining market stability and safeguarding investor interests.
Regulatory Landscape in South Korea
South Korea's Capital Markets Act presently confines the range of underlying assets for investment contract securities, including ETFs, to financial investment instruments, currencies, and ordinary commodities.
According to The Block, this framework excludes cryptocurrencies, as South Korea does not recognize them as financial assets. The country has barred financial institutions from investing in crypto since 2017.
Evolution of Crypto Regulations in South Korea
South Korea is in the process of crafting a two-part regulatory framework for cryptocurrencies. The initial part, passed last year, is slated to take effect in July 2024. This legislation represents the first step in establishing a comprehensive regulatory environment for cryptocurrencies. The second part aims to delineate clear rules governing the issuance, listing, and delisting of cryptocurrencies.
Despite inquiries, the FSC has not yet responded to requests for comments on the matter, leaving the industry awaiting further insights into the regulatory stance in South Korea.
According to Watcher Guru, market participants remain vigilant for updates and clarifications as South Korea navigates the evolving landscape of crypto regulations. The commitment to a phased regulatory approach reflects the authorities' cautious approach to ensure effective oversight of the cryptocurrency sector while addressing emerging challenges and opportunities.
Photo: Daniel Bernard/Unsplash
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