• South Korea’s opposition Democratic Party plans to make spot crypto ETFs locally accessible
• Local financial regulators currently ban such spot crypto ETF products
• The Democratic Party will request regulators to review the ban or consider amending existing regulations
The opposition Democratic Party in South Korea plans to move forward with its election pledge to make spot crypto funds accessible in the country, according to a recent news report.
Election Promise
The Democratic Party scored a major win in April’s general election, winning 175 seats out of 300 in the local legislative body. The party had pledged to enable local financial institutions to launch spot crypto ETFs and allow retail investors to purchase those funds through accounts with tax exemptions.
Next Steps
With the new National Assembly set to commence in June, the Democratic Party plans to request that the Financial Services Commission (FSC), the country’s top financial regulator, reexamine allowing spot bitcoin ETFs, according to a report by BloomingBit. This is aimed at opening up such products in South Korea.
The FSC currently does not permit the issuance or trading of spot bitcoin ETFs, having concluded there is no legal basis for cryptocurrencies to serve as underlying assets for such products.
The Democratic Party is also considering amending existing regulations if the FSC remains reluctant to approve bitcoin funds, the report added.
Current Landscape
South Korea has banned spot crypto ETFs while allowing futures-based bitcoin funds. The financial authorities have cited risks such as volatility and money laundering as reasons for not allowing spot crypto funds.
Some industry experts say the Democratic Party’s initiative faces challenges given the regulators’ stance. But the move shows a political will to expand crypto investment options for retail investors in South Korea.
Disclaimer
The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other crypto companies. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful and timely information about the crypto industry.
