South Korea’s top office urges FSC to revisit stance on spot Bitcoin ETFs

The Office of the President of the Republic of Korea urged the Financial Services Commission to reconsider its anti-ETF stance following SEC approval in the United States.

Just a week after South Korea’s Financial Services Commission (FSC) warned against trading the U.S.-based spot Bitcoin (BTC) exchange-traded funds (ETFs), the Presidential Office is now urging the regulator to reconsider its stance.

On Jan. 18, the Office of the President of the Republic of Korea — also referred to as the Yongsan Presidential Office — asked the FSC to refrain from having a ‘do’ or ‘not’ directive for ETFs, according to a local report from Maekyung. In rough translation, Tae-yoon Sung, head of the policy office of the presidential office, said:

“We are trying to make appropriate changes to the legal system of our country, or to consider whether what happens abroad can be accepted in our country.”

Looking beyond the risks associated with trading ETF assets, South Korea is assessing other low-risk aspects of the offering, said Sung.

The FSC is a principal financial regulator in South Korea, which issued a brief press release on Jan. 12 that suggested domestic securities firms trading or brokering overseas-listed spot Bitcoin ETFs “may violate” the Capital Markets Act — which seeks financial innovation and fair competition in South Korea’s capital markets.

However, the statement also noted that the regulatory regime for crypto in the country is still in its established stages and would review the regulations as things develop overseas.

Related: South Korea excludes NFTs, CBDCs from crypto interest mandate

Meanwhile, another South Korean financial regulator — the Financial Intelligence Unit (FIU) —  is reportedly planning to introduce new regulations around digital asset mixing services. 

According to a local report on Jan. 15, an FIU official revealed that the discussions started in Korea when the U.S. introduced sanctions against crypto mixers. However, the final decision on such an enforcement is not expected anytime soon.

Cryptocurrency mixing services help investors maintain privacy and reduces traceability by moving funds across multiple chains. As a result, South Korea’s FIU intends to counter illegal money laundering operations via mixers.