South Korea’s Sovereign Financial Fund KIC Buys Coinbase Shares

A Korean sovereign wealth fund, KIC, indirectly bought shares in listed US crypto giant Coinbase. Since then, however, the fund has shied away from crypto-related interests.

Korea Sovereign Financial Fund KIC buys Coinbase shares

According to Yonhap, the move was made by the Korea Investment Corporation (KIC), a sovereign wealth fund established by the government in 2005. It was initially classified as “advanced” to ensure the country’s long-term purchasing power by investing public money in international financial markets.

The fact that Coinbase was listed on the Nasdaq exchange in spring 2021, and mainstream financial advisors have ranked it as a company worth following – the Korean government theoretically owns an (estimated) 1.9 stake million USD in it.

Yonhap explained that index provider Morgan Stanley Capital International added Coinbase stock to one of its popular tracking indices last November. KCI invests public money in the tracker, and then Coinbase stock is “automatically added to the sovereign wealth fund’s portfolio.”

The Korean state has now acquired 8,700 shares in the US crypto company.

However, the regulation of cryptocurrencies is a touchy subject in South Korea. After years of tight regulation that led to mass bans on initial coin offerings (ICOs), virtual abolition of anonymous trading, and strict crypto exchange policies, the top two contenders in next month’s presidential election have indicated a more business- and crypto-friendly approach the industry.

Despite this, the crypto situation in South Korea is still ongoing – and KIC has been quick to distance itself from crypto-related issues.

A KIC official was quoted as saying that the fund did not see cryptocurrencies as an appropriate investment vehicle given the nature of the fund, and called his move a “virtually insignificant and indirect investment” in “a cryptocurrency exchange, not cryptocurrency.”

About Korea Investment Corporation (KIC)

Korea Investment Corporation (KIC) was established in 2005 to manage public funds entrusted by the government and Bank of Korea by investing in a variety of international financial assets. Our net worth at the end of 2015 was $91.8 billion.

KIC’s mission is to maintain and increase the international purchasing power of government wealth by consistently generating returns in excess of inflation and contributing to the development of the domestic financial industry.

KIC reports to Congress on its operations in accordance with the Act of Parliament and the Act on the Inspection and Inquiry into State Administrations. We are subject to annual review by Congress.

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