On October 10, South Korea‘s Financial Services Commission (FSC) announced the formation of a Virtual Asset Committee aimed at overseeing the approval of spot crypto exchange-traded funds (ETFs) in the country.
This committee, led by FSC Vice Chairman Soyoung Kim, will include representatives from various government sectors and nine members from the private sector, providing guidance on critical issues in the digital asset landscape, including the authorization of corporate accounts.
Currently, the South Korean Capital Markets Act prohibits Bitcoin and other crypto ETFs, alongside corporate accounts for digital assets, primarily due to anti-money laundering concerns.
To further support users, the FSC has also launched the Digital Asset User Protection Foundation, a non-profit organization dedicated to helping individuals recover assets from defunct service providers.
In addition to these initiatives, the FSC is reviewing renewal applications for digital asset service providers, with some registrations set to expire in October 2024. Chairman Kim Byung-hwan emphasized the agency’s commitment to establishing a robust monitoring system as new laws protecting virtual asset users come into effect. The FSC is also focused on identifying weaknesses in trading oversight and enforcing strict regulations against unfair trading practices.
Moreover, the FSC plans to gradually roll out the second phase of legislation, which will introduce additional regulations for crypto service providers, enhancing the overall regulatory framework in South Korea.
CryptoQuant CEO Ki Young Ju noted that the approval of a spot Bitcoin ETF could help reduce the “Kimchi premium,” a term that describes the higher average prices of crypto in South Korea compared to global markets. This premium often arises from increased domestic demand and fluctuates with market conditions and regulatory changes, making it a key indicator for traders.
