Nikolas Sargeant
The recent approval of Ethereum ETFs by the US SEC marked a significant shift in the market. Previously, most market participants had anticipated a rejection of these ETFs, at least until May.
According to The Korea Times on Monday, the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) are reluctant to allow crypto assets to be traded on the traditional securities market.
The FSC referenced the Capital Markets Act to explain its hesitation regarding crypto ETFs. This Act restricts ETFs to underlying assets, which traditionally include real financial assets or securities such as international currencies or commodities.
Jung Eui-jung, head of the Korean Stockholders’ Alliance, has reportedly urged authorities to follow the US example and approve ETFs for Bitcoin and Ethereum. He argues that this move is essential to retain both traditional and digital asset investors in Korea.
“Who would want to invest their money in a market that lags behind the fast-changing regulatory landscape?” Jung stated.
South Korea Financial Watchdog Stalls on Crypto ETFs
Currently, South Korean crypto investors do not have the option to trade spot Bitcoin and Ethereum ETFs. Moreover, in January, financial authorities extinguished any hopes for 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 on virtual assets. Although he personally has a favorable view, he noted that others within the agency are more cautious. Lee emphasized the need to consider all perspectives and have open discussions before proceeding.
“Among authorities, I am one of those who are positive about virtual assets, while there are others who are wary, and we need to hear their opinions as well. We are internally discussing it,” Lee said.
Korean Parties Vie For Crypto Voters
In an unexpected twist, South Korea’s vibrant cryptocurrency market has become a key issue in the run-up to the country’s parliamentary elections in April. Both major political parties are attempting to attract voters with crypto-focused promises.
President Yoon Suk Yeol’s People Power Party recognized the growing impact of the crypto industry and pledged to delay the implementation of a digital-asset tax, a move likely to appeal to crypto investors.
Conversely, the opposition Democratic Party focused on easing restrictions on ETFs, including those that would allow investment in US Bitcoin products. This approach aimed to attract voters seeking more accessible cryptocurrency investments.
