The Financial Services Commission (FSC) of South Korea banned domestic securities firms from acting as agents for overseas-listed Bitcoin spot ETFs last week, leading major South Korean securities firms such as Samsung Securities to halt trading. South Korean securities firms are concerned that Bitcoin futures ETFs may also be banned. However, the FSC announced today that it will allow overseas Bitcoin futures ETFs to continue trading.
Background:
To curb the speculation of junk coins, South Korea will introduce guidelines for “listing and delisting” virtual currencies.
While the U.S. Securities and Exchange Commission (SEC) approved the listing of 11 Bitcoin spot ETFs on the 11th, South Korea, as one of the countries most enthusiastic about investing in cryptocurrencies, banned domestic securities firms from acting as agents for overseas-listed Bitcoin spot ETFs on the 13th. Subsequently, major South Korean securities firms such as Samsung Securities suspended brokerage services for Bitcoin spot ETFs.
Overseas Bitcoin futures ETFs can continue trading.
What worries South Korean securities firms is whether they will also be prohibited from acting as agents for overseas-listed Bitcoin futures ETFs. However, after these securities firms sought guidance from the FSC, the FSC issued a statement today stating that it will allow overseas Bitcoin futures ETFs to continue trading and emphasized that there are no plans to regulate overseas Bitcoin futures ETFs differently from the current situation.
According to South Korean media Hankyung, since Bitcoin futures ETFs track the Bitcoin futures index listed on the Chicago Mercantile Exchange (CME), rather than the Bitcoin spot price, it does not violate the requirements of the South Korean Capital Market Act for underlying assets.
However, the FSC emphasized that issuing and providing brokerage services for Bitcoin spot ETFs may violate the existing position of the South Korean government and the Capital Market Act. The legal systems of the United States and South Korea are different, making it difficult to immediately apply the practices of the United States to South Korea.
According to Yonhap News Agency, a senior official from the FSC stated on the 14th that although the SEC approved Bitcoin spot ETFs last week, South Korean financial regulators will not review relevant U.S. Bitcoin spot ETFs or introduce Bitcoin spot ETFs in South Korea.
South Korea strengthens cryptocurrency regulation.
Currently, South Korea is seeking to establish cryptocurrency regulations composed of two parts. The first part is the “Virtual Asset User Protection Act” passed last year, which will take effect in July this year. This law integrates 19 related cryptocurrency-related bills, defines digital assets, and sets penalties for illegal activities such as the use of insider information, market manipulation, and unfair trading.
The second part is to establish clear regulations for the issuance, listing, and delisting of cryptocurrencies. The Financial Supervisory Service of South Korea revealed earlier this month that the development of these guidelines has been closely coordinated with multiple virtual asset exchanges. After six months of effort, it is now approaching the final stage.
South Korea’s enthusiasm for cryptocurrency trading is well-known in the cryptocurrency market. A report released by the National Tax Service of South Korea in September last year stated that in the same year, the total amount of foreign financial assets declared by South Koreans reached 186.4 trillion Korean won, of which cryptocurrency assets accounted for 130.8 trillion Korean won, accounting for approximately 70%.
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