The US Bitcoin spot ETF attracted significant attention on its first day of trading. However, the Financial Services Commission (FSC) of South Korea issued a statement prohibiting domestic securities firms from acting as agents for overseas-listed Bitcoin spot ETFs, which caused a sharp decline in South Korean cryptocurrency concept stocks.
(Previous summary:
Bitcoin spot ETF “first-day trading volume” exceeded $4.6 billion! Grayscale GBTC leads, followed closely by BlackRock
)
(Background supplement:
South Korea announced that the “Virtual Asset User Protection Law” and other laws will take effect in July next year, forming complete regulation
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Table of Contents:
South Korean authorities issue warnings to securities firms
South Korean cryptocurrency concept stocks fall over 10%
FSC may open after clear regulation
The US Bitcoin spot ETF officially opened for trading last night, with the first-day trading volume surpassing $4.6 billion and the number of transactions exceeding 700,000, which is twice that of QQQ (Nasdaq 100 Index ETF). The crypto community excitedly claimed to be “stock traders” now.
However, for South Korea, one of the countries most enthusiastic about investing in cryptocurrencies, its financial regulatory authority, the FSC, issued a statement today stating that it is clearly a corresponding measure to the approval of the Bitcoin spot ETF by the SEC. This statement has led major South Korean securities firms such as Mirae Asset Securities and Samsung Securities to prohibit customers from purchasing overseas Bitcoin spot ETFs.
For example, Mirae Asset Securities has suspended trading of the world’s first Bitcoin spot ETF, “Purpose Bitcoin ETF” (BTCC), which was listed on the Canadian Securities Exchange as early as February 2021. Although it was feasible to trade through domestic securities firms before the FSC issued the statement, it has now been temporarily suspended due to intensified regulatory pressure.
A spokesperson for Mirae Asset Securities revealed to The Block that the FSC’s latest statement has made securities firms worried that existing foreign Bitcoin ETF transactions may be considered illegal, hence the suspension.
Note: However, foreign Bitcoin futures ETFs are still being traded on multiple platforms as they have not been warned by the FSC.
Possibly influenced by this news, South Korean cryptocurrency concept stocks all experienced a significant decline today. Woori Technology Investment, which holds shares of Dunamu, the operator of Upbit, and Hanhwa Investment & Securities, saw their stock prices drop by 9.1% and 14.89% respectively. T Scientific, which holds shares of Bithumb, and its parent company Wizit also saw their stock prices fall by 11.7% and 16.76% respectively.
On the other hand, Bitcoin futures ETFs have not been affected by the FSC’s statement, so South Korean securities firms continue to offer trading of these products.
At the same time, the FSC mentioned in its statement that regulations regarding virtual assets are still being formulated, including the “Virtual Asset User Protection Law” that will take effect in July this year. Considering that there are already relevant product cases in overseas markets such as the United States, South Korea plans to further review these products and does not rule out the possibility of opening up trading for overseas-listed Bitcoin spot ETFs in the future.
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