Following the approval of a Bitcoin Spot ETF by the US on January 10th, South Korea has maintained its ban on crypto ETFs, citing concerns about financial stability and investor protection, according to local media reports.
While the United States embraces the new era of Bitcoin Spot ETFs, South Korea’s financial regulator remains committed to existing rules that limit the inclusion of crypto in the ETF landscape.
The decision reflects the country’s cautious approach to the evolving crypto landscape, which is rooted in the goal of maintaining financial stability.
South Korean law currently restricts ETFs to traditional financial instruments and commodities, explicitly excluding crypto.
Since 2017, the country’s financial institutions have been prohibited from investing in cryptocurrencies because they are not recognized as official financial assets.
Despite the current ban, South Korea is actively working to develop comprehensive crypto regulations. The first component of this regulatory framework was approved last year and is set to take effect in July 2024.
This first phase focuses on laying the groundwork for crypto regulation, while the second phase, which is currently in the works, is expected to provide clear and specific rules governing crypto issuance, listing, and delisting.
South Korea’s methodical approach to cryptocurrency regulation reflects the country’s commitment to creating a secure and stable environment for investors and the financial sector.
The country’s proactive stance demonstrates a recognition of the importance of adapting regulatory frameworks to the dynamic nature of the crypto industry, balancing innovation with investor protection and financial stability.
