South Korea’s Monetary Companies Fee (FSC) has just lately issued a press release that might have vital implications for the native crypto market in its area.

The FSC has indicated that home securities corporations’ brokering of US spot Bitcoin Change-Traded Funds (ETFs) would possibly violate South Korea’s laws regarding digital property and the Capital Markets Act.

This announcement got here as a response to the US Securities and Exchange Commission’s (SEC) approval of spot Bitcoin ETFs, a choice the trade has lengthy awaited.

South Korea’s Stance On Crypto

Notably, this FSC’s declaration on brokering US spot Bitcoin ETFs underscores the regulatory divergence between South Korea and the US of their method to crypto ETFs.

Whereas the US has made a landmark choice by permitting a number of exchange-traded funds tied to the spot value of Bitcoin to start buying and selling, after hesitations, South Korea maintains a stance that seems to be extra cautious.

The regulator has additionally just lately reiterated its intention to uphold the present restrictions on South Korean monetary establishments investing in digital property, citing the “stability of financial markets and investor protection” as main considerations.

A South Korea’s Monetary Companies Fee representative conveyed to a neighborhood media supply that the US’s current endorsement of spot Bitcoin ETFs wouldn’t affect the Korean regulatory physique to revoke or reassess its present prohibition. The official notably famous:

It’s exhausting to say that the SEC’s choice to approve a restricted spot ETF is a brand new case (to the extent that it’ll change the [South Korea’s] home market).

The FSC’s choice to uphold its ban on spot Bitcoin ETFs, regardless of the US SEC’s approval, displays South Korea’s regulatory method to crypto. To this point, the nation doesn’t acknowledge digital foreign money as a monetary asset and has prohibited monetary establishments from investing in crypto since 2017.

This strict regulatory framework extends to limitations imposed by the nation’s Capital Markets Act, which restricts the scope of underlying property for funding contract securities to exclude crypto.

This current improvement is a part of a collection of measures aimed toward regulating the digital foreign money house in South Korea. Earlier this month, the FSC proposed an modification to restrict the use of domestic crypto credit cards for buying digital foreign money on international exchanges.

Citizen Curiosity In Crypto

Regardless of these regulatory hurdles, South Korean residents’ curiosity in and perception within the digital foreign money market stays robust.

A current report from DeSpread, a Web3 market technique consulting agency, means that the Korean crypto house will comprise roughly 6 million investors, accounting for greater than 10% of the inhabitants.

This statistic illustrates the rising recognition of digital foreign money in South Korea, even within the face of stringent authorities crypto laws.