South Korea’s financial regulator is gearing up to review the approval of spot crypto ETFs and the legalization of corporate crypto accounts. This step signals a potential shift in the country’s approach to cryptocurrency regulation, with a focus on creating a more structured and secure market for digital assets.
Virtual Assets Committee to Lead the Review
A newly formed Virtual Assets Committee, chaired by the vice chairman of the Financial Services Commission (FSC), will oversee this review. The committee includes representatives from various government ministries and private-sector experts. The goal is to assess whether South Korea should approve spot crypto exchange-traded funds (ETFs) and allow corporate crypto accounts, which are currently prohibited.
While countries like the U.S. and Hong Kong have already given the green light to spot Bitcoin and Ethereum ETFs, South Korea is still in the process of making its decision. The FSC has not yet provided a specific timeline for when the review of crypto ETF approval will take place, leaving investors and crypto enthusiasts awaiting further updates.
Regulatory Reform Amid Evolving Crypto Market
This move comes as South Korea’s domestic crypto market continues to evolve, leading to increased calls for regulatory reform. The FSC is currently working on renewing licenses for virtual asset service providers that registered in 2021, while also pushing for amendments to the Specific Financial Information Act. These amendments aim to crack down on market manipulation and unfair trading practices.
In addition to reviewing ETFs, the FSC is also considering “Phase 2 legislation,” which will introduce stricter regulations for crypto businesses. This legislation could include tougher requirements for issuing and listing new digital assets, further enhancing oversight and protection for investors. These steps follow the Virtual Asset User Protection Act, enacted in July 2024.
Upbit Under Increased Scrutiny
As part of its regulatory expansion, the FSC has been closely monitoring major domestic crypto platforms like Upbit, which holds 80% of the local market share. Upbit, South Korea’s largest crypto exchange, is also ranked fifth globally in terms of 24-hour trading volume. The regulator has been investigating the exchange’s market dominance and its relationship with K Bank, signaling a broader effort to ensure fair competition and transparency in the crypto space.
Conclusion
As South Korea reviews its crypto regulations, the approval of spot crypto ETFs and corporate crypto accounts could mark a major milestone for the country’s crypto industry. While the timeline for these changes remains unclear, the formation of the Virtual Assets Committee and the push for stricter regulations show that South Korea is serious about balancing market growth with investor protection.
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Disclosure: This article is for educational purposes only and does not constitute investment advice.
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