South Korean securities companies such as Samsung Securities and Mirae Asset Securities can no longer facilitate trading of overseas spot Bitcoin Exchange-Traded Funds (ETFs).
In a historic milestone, the US Securities and Exchange Commission (SEC) approved the applications for spot Bitcoin ETFs on Wednesday. However, laws in other countries might not allow fund managers to give exposure to these ETFs to their clients.
Overseas Spot Bitcoin ETFs May Violate South Korean Crypto Laws
South Korean regulator– the Financial Services Commission (FSC), issued a notice suggesting that domestic securities firms shall not offer exposure to overseas spot Bitcoin ETFs.
“Domestic securities firms brokering overseas-listed Bitcoin spot ETFs may violate the existing government stance on virtual assets * and the Capital Markets Act,” states the notice.
Due to this notice, South Korean securities companies such as Samsung Securities and Mirae Asset Securities suspended trading for German and Canadian spot Bitcoin ETFs. These firms will also be unable to facilitate trading for US Spot Bitcoin ETFs.
“Bitcoin spot ETFs cannot be included in investment portfolios such as domestically listed ETFs or funds. Bitcoin spot ETF trading will be restricted in any way in Korea,” an industry official told a local news outlet.”
Read more: Crypto Regulation: What Are the Benefits and Drawbacks?
How South Korea is Working on Crypto Regulations
However, FSC says it is working on crypto regulation. And some rules will be further reviewed considering the regulations in other countries such as the US. Not to mention, FSC chief Yoo Bok-hyun will visit the US to discuss crypto regulations with the SEC chair Gary Gensler.
Crypto assets are immensely popular amongst South Korean citizens. As a matter of fact, the asset class has a penetration rate of 18.85% in the country. By 2028, the penetration is forecasted to grow to 23.45%.
Even 6% of South Korean National Assembly Members own crypto assets. In May 2023, the country passed a bill requiring lawmakers to disclose their crypto holdings.
Due to crypto’s popularity in South Korea, it needs regulatory oversight. Hence, South Korea’s Financial Supervisory Service (FSS) is set to implement stringent regulations for virtual assets starting in July 2024.
Read more: How Does Regulation Impact Crypto Marketing? A Complete Guide