Despite the recent approval of spot Bitcoin
exchange-traded funds (ETFs) by the US Securities and Exchange Commission
(SEC), the South Korean Financial Services Commission (FSC) firmly stated it
would not permit the trading of cryptocurrencies on its local financial market.
This decision, detailed in a press release yesterday
(Thursday), sends a clear message that South Korea is cautious about the
fast-growing crypto market.
The FSC’s stance centers around the potential
contradiction between domestic securities firms brokering overseas-listed spot Bitcoin ETFs and the South Korean government’s position on virtual assets.
The FSC emphasized that such brokerage may violate
the Capital Market Act, raising concerns about aligning these activities with
the nation’s regulatory framework.
With no legal basis recognizing virtual assets as
basic assets, the FSC deems it challenging to allow the listing and indirect
trading of crypto ETFs through securities firms. Despite the current stance, the FSC hinted at
possible future developments. Additional reviews will be conducted as South Korea approaches enforcing a new law on virtual assets in July.
Recently, the FSC proposed a ban on crypto purchases using cryptocurrencies. This move addresses the FSC’s
concerns regarding the illegal outflow of domestic funds fueled by card
payments on overseas virtual asset exchanges.
The FSC’s notice explicitly points out the risks
associated with card transactions on virtual asset platforms, including money
laundering, speculation, and the encouragement of speculative activities.
The proposed ban is part of a broader strategy to
establish a cooperative foundation with international brands, preventing
foreign currency outflow and strengthening measures against money laundering ,
Finance Magnates reported.
South Korea’s Crypto Landscape
As the proposal awaits public feedback until
February 13, it marks a crucial step in the regulatory landscape of South
Korea’s crypto market. The ban, if approved, is anticipated to come into effect
by the end of the first half of 2024, subject to a thorough review and
resolution process.
South Korea, renowned for its high crypto adoption
rate, is grappling with the challenges posed by the increasing popularity of
digital assets. This regulatory move follows the country’s previous mandate for
the identification verification of users on local cryptocurrency exchanges.
Despite the recent approval of spot Bitcoin
exchange-traded funds (ETFs) by the US Securities and Exchange Commission
(SEC), the South Korean Financial Services Commission (FSC) firmly stated it
would not permit the trading of cryptocurrencies on its local financial market.
This decision, detailed in a press release yesterday
(Thursday), sends a clear message that South Korea is cautious about the
fast-growing crypto market.
The FSC’s stance centers around the potential
contradiction between domestic securities firms brokering overseas-listed spot Bitcoin ETFs and the South Korean government’s position on virtual assets.
The FSC emphasized that such brokerage may violate
the Capital Market Act, raising concerns about aligning these activities with
the nation’s regulatory framework.
With no legal basis recognizing virtual assets as
basic assets, the FSC deems it challenging to allow the listing and indirect
trading of crypto ETFs through securities firms. Despite the current stance, the FSC hinted at
possible future developments. Additional reviews will be conducted as South Korea approaches enforcing a new law on virtual assets in July.
Recently, the FSC proposed a ban on crypto purchases using cryptocurrencies. This move addresses the FSC’s
concerns regarding the illegal outflow of domestic funds fueled by card
payments on overseas virtual asset exchanges.
The FSC’s notice explicitly points out the risks
associated with card transactions on virtual asset platforms, including money
laundering, speculation, and the encouragement of speculative activities.
The proposed ban is part of a broader strategy to
establish a cooperative foundation with international brands, preventing
foreign currency outflow and strengthening measures against money laundering ,
Finance Magnates reported.
South Korea’s Crypto Landscape
As the proposal awaits public feedback until
February 13, it marks a crucial step in the regulatory landscape of South
Korea’s crypto market. The ban, if approved, is anticipated to come into effect
by the end of the first half of 2024, subject to a thorough review and
resolution process.
South Korea, renowned for its high crypto adoption
rate, is grappling with the challenges posed by the increasing popularity of
digital assets. This regulatory move follows the country’s previous mandate for
the identification verification of users on local cryptocurrency exchanges.
