Korean Regulators Under Pressure to Approve Crypto ETFs

The South Korean government faces increasing pressure to approve cryptocurrency ETFs after the SEC approved spot Ethereum ETFs in the United States, following the earlier approval of Bitcoin ETFs.

This decision has sparked discussion among local media, and it is expected to compel Seoul’s financial regulators to reconsider their position on digital assets.

The SEC’s decision to allow ETFs for Ethereum, the second-largest cryptocurrency in the world, on May 24, 2021, has been seen as a significant development in bridging the gap between traditional finance and the digital asset industry.

ETFs, which allow investors to gain exposure to a variety of securities, are considered a crucial step in bringing digital assets into the mainstream. In contrast, the Korean Financial Services Commission (FSC) and Financial Supervisory Service (FSS) have been hesitant about introducing cryptocurrency trading on traditional securities markets.

The FSC requires ETFs to strictly comply with the Capital Markets Act, which limits them to traditional underlying assets such as established financial instruments, securities, international currencies, and commodities, which serve as the foundation for financial derivatives.