Koreans Mount Pressure on Regulators For Crypto ETFs

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The launch of spot crypto ETFs in the Securities and Exchange Commission (SEC) in the United States is likely to trigger some level of discomfort in the digital asset ecosystem as well as in regulators in different countries. This situation is evident in Korea where residents have begun to mount pressure on financial regulators including the Korean Financial Services Commission (FSC) and Financial Supervisory Service (FSS).

Koreans Want Spot Crypto ETFs 

Koreans are requesting that spot crypto ETFs be approved for trading in their nation, citing the latest development in the U.S. 

Noteworthy, the U.S SEC approved Ethereum ETFs for trading on Thursday, sending the broad crypto market into jubilation. This comes on four months after the same regulators greenlighted spot Bitcoin ETFs trading proposed by the likes of BlackRock, Fidelity, Grayscale, and Bitwise. 

The intense request for crypto ETF consideration by Koreans was expected as the FSC and FSS had previously tried to dim the light on the subject. Xangle, a Seoul-based data and information provider on digital currencies, was one of those who saw it coming. 

“Under the circumstances, the SEC’s Thursday decision on ethereum is anticipated to press Seoul’s financial regulators to reconsider its regulations against digital assets,” Xangle said.

Korean Regulators Frown at Crypto ETFs 

According to local news source The Korea Times, these regulators have been quite skeptical about permitting digital asset ETF trading in Korea. They are concerned about the possible impact it could make on their traditional securities market.

With reference to the Capital Markets Act, the FSC stated that ETFs get their support from traditional underlying assets, that is, the real financial assets or the security that a financial derivative is based on. It could either be established financial instruments, securities, international currencies or commodities. These regulators do not think crypto ETFs fall into the category.

Korea Need ETFs to Revive Stock Market 

Jung Eui-jung, the head of the Korean Stockholders’ Alliance thinks FSC and FSS should reconsider their stance on the crypto ETF matter. He specifically thinks Korea should make a U-turn and follow the U.S. path as it concerns digital asset ETF. 

The Seoul stock market is currently experiencing a downtrend as well as a low valuation. Eui-jung strongly believes that the country’s rigid regulatory policy could be the reason behind this discouraging market outlook. Hence, he encouraged endorsing ETFs for Bitcoin and Ethereum “in order to ensure that investors, both in traditional finance and digital assets, do not exit Korea.”

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