US Bitcoin ETFs Are Now Violating South Korean Local Laws

Key Points:

• The South Korean FSC warns that Korean brokerage of US Bitcoin ETFs may breach local laws.
• FSC commits to reviewing regulations surrounding US Bitcoin ETF investments.

The Financial Services Commission (FSC) of South Korea, the nation’s financial regulator, has issued a statement expressing potential legal concerns regarding recently-listed US Bitcoin Exchange Traded Funds (ETFs).

South Korean Regulator Flags Legal Concerns Over US Bitcoin ETFs

The FSC warns that domestic brokerage of US Bitcoin ETFs by Korean securities firms might violate the existing government stance on virtual assets and the Capital Markets Act.

The FSC highlights the possibility of conflict with the Virtual Asset User Protection Act and the Capital Markets Act without providing detailed elaboration. The regulator emphasizes its commitment to reviewing the regulatory landscape surrounding the investment in US Bitcoin ETFs.

This development follows the landmark moment in the U.S., where several exchange-traded funds tied to the spot price of Bitcoin commenced trading on Thursday after a decade-long pursuit of regulatory approval in the cryptocurrency industry.

In a related context, the FSC announces a forthcoming review, coinciding with a scheduled meeting between SEC chair Gary Gensler and his Korean counterpart in Washington, DC later this month.

Furthermore, South Korea‘s regulatory authorities reveal plans to introduce regulations requiring officials to disclose their cryptocurrency holdings. This move aligns with the country’s ongoing efforts to establish a transparent framework for the crypto sector.

It’s worth noting that Vanguard, a major investment firm, has decided against offering US Bitcoin ETFs on its platform, citing a misalignment with the company’s investment portfolio strategy.

As Coincu reported, the FSC reiterates its commitment to preventing illegal outflows of domestic funds overseas. This commitment is reflected in previous proposals, such as the ban on using credit cards for cryptocurrency purchases, aiming to curb foreign currency outflows and prevent money laundering.