South Korea still hasn't let go of cryptocurrency ETFs
While the U.S. Securities and Exchange Commission (SEC) recently approved spot bitcoin exchange-traded funds (ETFs), South Korea's Financial Services Commission (FSC) has said it will not allow cryptocurrency trading in local financial markets.。
While the U.S. Securities and Exchange Commission (SEC) recently approved spot bitcoin exchange-traded funds (ETFs), South Korea's Financial Services Commission (FSC) has said it will not allow cryptocurrency trading in local financial markets.。
News recently made it clear that South Korea is cautious about the cryptocurrency market。The FSC's position revolves around the potential contradiction between domestic securities firms acting for overseas-listed Bitcoin ETFs and the South Korean government's position on virtual assets.。
FSC's Position on Cryptocurrency Listing and Trading
The FSC stressed that such brokering activities could be in violation of the Capital Markets Act, raising concerns about whether these activities are in line with the national regulatory framework.。
In the absence of a legal basis for recognizing virtual assets, the FSC finds it challenging to allow crypto ETFs to be listed and indirectly traded through securities firms。However, despite its current position, the FSC hints at possible future developments.。As South Korea prepares to implement a new law on virtual assets in July, there will also be more reviews.。
Recently, the FSC proposed to ban the use of credit cards to purchase cryptocurrencies。The move addresses regulators' concerns that overseas virtual asset exchanges are facilitating illegal outflows of domestic funds through card payments.。The FSC's notice highlights the risks associated with card transactions on virtual asset platforms, including money laundering and speculation.。
The proposed ban is reportedly part of South Korea's broader strategy to build a cooperative base with international brands, prevent foreign exchange outflows and strengthen anti-money laundering measures.。
Cryptocurrency landscape in South Korea
The proposal, which will await public feedback by February 13, marks a key step forward in the regulatory landscape for South Korea's cryptocurrency market.。If approved, the ban is expected to come into force by the end of the first half of 2024, but will also need to go through a thorough review and resolution process.。
South Korea, known for its high adoption rate of cryptocurrencies, is grappling with the challenges posed by the growing popularity of digital assets, a move that follows the country's previous authorization of local cryptocurrency exchanges to verify user identities.。
Recently, the U.S. Securities and Exchange Commission approved 11 Bitcoin ETFs, paving the way for spot Bitcoin ETFs to be listed on major U.S. stock exchanges.。Following the approval, SEC Chairman Gary Gensler clarified the scope of the mandate, emphasizing that the mandate specifically targets exchange-traded products that hold bitcoin, a non-securities commodity.。
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