Crypto News – The South Korean government continues to prevent the introduction of bitcoin ETFs, keeping with its long-standing policy of not recognizing digital currencies as financial assets. Financial institutions in the nation are not permitted to invest in cryptocurrencies as of 2017.
South Korea ETF Ban Continues Strongly in 2024
On December 13, 2017, the government enacted emergency measures about virtual currencies, solidifying this stance. Financial institutions are not allowed to buy, keep, use as collateral, or invest in virtual assets as a result of these regulations.
According to insider information, the South Korean government’s commitment to investor safety and financial market stability is reiterated by the Financial Services Commission (FSC). The FSC representative emphasized that there hasn’t been a review to change the government’s guidelines for financial institutions investing in virtual assets.
South Korea Reiterates Tough Stance Against ETFs
Although the U.S. permits futures ETFs and other nations like China, Germany, and Canada offer spot ETFs, South Korea believes that the SEC’s restricted permission of spot ETFs is insufficient to change its domestic laws. Cryptocurrencies cannot be used as underlying assets for ETFs; instead, only financial investment products, currencies, and general commodities are permitted under South Korean law, specifically Article 4 of the Capital Markets Act.
Reiterating a cautious stance, the FSA of South Korea plans to revise the rules to allow virtual assets to be used as underlying assets in ETFs. In a recent interview with local media, an FSA official cautioned that permitting cryptocurrency investments may potentially erode the foundation of the domestic stock market and stated that the SEC‘s hesitant acceptance of virtual asset ETFs was a reaction to a court ruling.
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