The Financial Services Commission (FSC) of South Korea prohibited domestic securities firms from acting as agents for overseas-listed Bitcoin spot ETFs last week, leading major Korean securities firms such as Samsung Securities to halt trading. Korean securities firms were concerned that Bitcoin futures ETFs might also be banned. However, the FSC announced today that it will allow overseas Bitcoin futures ETFs to continue trading.
Summary: South Korea blocks Bitcoin spot ETF! Samsung, Future… Several securities firms halt trading.
Background: To curb speculation in junk coins! South Korea to introduce guidelines for “listing and delisting” virtual currencies.
The U.S. Securities and Exchange Commission (SEC) approved the listing of 11 Bitcoin spot ETFs on the 11th. However, South Korea, 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 Korean securities firms such as Samsung Securities temporarily suspended their brokerage services for Bitcoin spot ETFs.
Overseas Bitcoin futures ETFs can continue trading
What worries 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. It emphasized that there are no plans to regulate overseas Bitcoin futures ETFs differently from the current situation.
According to Korean media Hankyung’s report, since Bitcoin futures ETFs track the Bitcoin futures index listed on the Chicago Mercantile Exchange (CME), rather than the spot price of Bitcoin, they do not violate the requirements of the Korean Capital Market Act regarding underlying assets.
However, the FSC emphasized that issuing and providing brokerage services for Bitcoin spot ETFs may violate the existing position of the 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’s report, a senior official of the FSC stated on the 14th that although the SEC approved Bitcoin spot ETFs last week, the Korean financial regulatory authorities will not review related U.S. Bitcoin spot ETFs or launch Bitcoin spot ETFs in Korea.
South Korea strengthens cryptocurrency regulation
Currently, South Korea is seeking to establish cryptocurrency regulations consisting of two parts. The first part is the “Virtual Asset User Protection Act,” which was passed last year and will take effect in July this year. This law consolidates 19 related cryptocurrency-related bills, defines digital assets, and sets penalties for illegal activities such as the use of non-public information, market manipulation, and unfair trading.
The second part is to establish clear regulations for the issuance and listing/delisting of cryptocurrencies. The Financial Supervisory Service of South Korea revealed earlier this month that the process of formulating these guidelines has been closely coordinated with multiple virtual asset exchanges. After six months of effort, it is currently nearing completion.
It is well known that South Korea loves trading cryptocurrencies. A report released by the National Tax Service of South Korea in September last year indicated that 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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