South Korea’s Presidential Office Calls for Reevaluation of FSC’s Position on Spot Bitcoin ETFs

Jimmy Aki
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The Presidential Office of South Korea has urged the Financial Services Commission (FSC) to reconsider the possibility of approving a spot bitcoin exchange-traded fund (ETF).

Foreign Offerings to be Applicable in Domestic Markets

According to a January 18 local report from Maekyung Media Group, the Presidential Office of South Korea requested the FSC to undertake a study evaluating the feasibility of making foreign offerings applicable in the domestic markets.

Seong Tae-yoon, the Director of the Presidential Policy Office, stated that the office has advised the financial agency not to adopt a definitive stance of “yes or no” regarding ETFs.

He added that the South Korean government is actively working to implement appropriate changes to the country’s legal system or evaluate the feasibility of adopting practices observed in other countries.

The FSC, in a press release on January 12, stated that domestic securities firms engaging in brokering overseas-listed Bitcoin spot ETFs could potentially violate the current government stance on virtual assets and the Capital Markets Act.

However, Tae-yoon’s statements indicate that the government is contemplating revisiting its initial position on the launch of the Bitcoin spot ETF.

The head of the policy office further highlighted an ongoing investigation aimed at preventing ETFs from becoming an unintended side effect or a risk factor for other financial products or the broader economy.

Upcoming Digital Asset Regulation

Meanwhile, the Financial Intelligence Unit (FIU), another financial regulator in South Korea, is contemplating the implementation of more stringent regulations on crypto-mixing services like Tornado Cash. The primary focus is on enhancing anti-money laundering measures within the cryptocurrency industry.

This decision follows a report revealing that crypto-mixing services employ techniques to shuffle funds across blockchains, aiming to safeguard user privacy and obscure transaction details.

The FIU is motivated by concerns about potential illegal money laundering activities facilitated by the anonymity provided by mixers. This move aligns with the United States’ actions against Tornado Cash and related crypto-mixing services.

The regulator’s decision is in accordance with guidelines from the Financial Action Task Force, which aims to mitigate threats associated with digital assets.

However, the final determination and specific details regarding Korea’s regulations on mixing services are still pending. Critics argue that such stringent policies limit financial freedom and impede technological innovation in the cryptocurrency sector.

IBK Securities Predict Hot-Red Demand for Direct Investment in Crypto

IBK Securities, a financial investment firm in South Korea, has predicted a high demand for direct investment in cryptocurrency.

Despite the government’s efforts to eliminate the financial investment income tax, the company foresees heightened volatility towards the year-end, driven by the introduction of virtual asset taxation in 2025.

Kim In-sik, a researcher at IBK Investment & Securities, highlighted the company’s strategy of positioning itself in Ethereum futures ETF investment, influenced by Ethereum’s lower price compared to Bitcoin.

Furthermore, IBK Securities employs an event-driven strategy, seizing opportunities to generate profits during price fluctuations resulting from various events. This approach would alleviate ‘FOMO’ (fear of missing out) on investment opportunities from South Korean residents.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.