South Korea has reiterated its ban on crypto ETFs despite the US approving 11 spot bitcoin ETFs earlier this week. As it stands, South Korea prohibits local financial institutions from owning or buying crypto and investing in businesses offering crypto.
South Korea’s Financial Services Commission (FSC) maintains its policy restricting financial institutions from launching crypto exchange-traded funds (ETFs). The statement comes despite the US Securities and Exchange Commission approving 11 spot bitcoin ETFs.
South Korea Wants Nothing to Do With ETFs
According to local media reports, South Korea’s top financial regulator said it will not change its anti-ETF stance. An official from the FSC explained the US’s approval of spot BTC ETFs would not sway it to lift its current ban on ETFs or even to reconsider it. The FSC official told the media that it would uphold the ban on ETFs, citing stability and investor security.
“…the government has consistently maintained the principle of prohibiting financial institutions from investing in virtual assets for the stability of the financial market and protection of investors,” the FSC official explained.
Adding;
“There’s no situation warranting a change in government policy, and it has not been reviewed.”
The official commented while the US previously allowed futures ETFs, and countries like Hong Kong, Germany, and Canada already operate spot ETFs, the recent authorization is nothing new to consider.
Capital Markets Act Forbids Crypto as Underlying Assets for ETFs
According to Article 4 of the country’s Capital Markets Act, underlying assets for ETFs are limited to financial investment products, currencies, and general commodities. The list excludes crypto from the scope of underlying assets for investment contract securities.
In 2017, South Korea banned financial institutions from investing in crypto and does not recognize cryptocurrencies as financial assets.
ETF Excitement
While South Korea adamantly prohibits ETFs, the crypto industry is reveling in excitement about the SEC’s approval of spot bitcoin ETFs. Amid the joyous win for bitcoin and crypto in the US, the market acted rather unexpectedly. With the announcement, many altcoins, particularly Ethereum (ETH), rocketed, while $BTC remained flat. The news saw $ETH gain over 10% on the day of approval.
The road to a spot ETF approval has been long and arduous, and indeed comes as a welcome “win” for all who have walked it.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
