May 29, 2024
South Korea's FSC Flags Issues with U.S. Bitcoin ETFs
Bitcoin ETF

South Korea Questions Legality of the Listed U.S. Bitcoin ETFs

South Korea’s Financial Services Commission (FSC), the nation’s financial regulatory body, has expressed concerns about the potential violation of Korean law by recently-listed U.S. bitcoin ETFs. The FSC stated that the domestic brokerage of a U.S.-listed bitcoin spot ETF by Korean securities firms might clash with the Virtual Asset User Protection Act and the Capital Markets Act, though specific details were not provided.

Back in 2017, the governor of the Bank of Korea, Lee Ju-yeol, declared that cryptocurrencies are considered commodities rather than legal tender, emphasizing the necessity for regulation in this domain. The FSC announced that a more thorough examination is forthcoming. SEC chair Gary Gensler is slated to meet his Korean counterpart in Washington, DC, later this month.

Authorities in South Korea have recently announced plans to introduce regulations requiring disclosure of officials’ crypto holdings. Meanwhile, in the United States, Vanguard has opted not to offer spot bitcoin ETFs, including BlackRock’s iShares Bitcoin Trust (IBIT) and Grayscale Bitcoin Trust (GBTC), on its platform. Vanguard cited a misalignment with the company’s investment portfolio strategy as the reason for this decision.

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