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South Korea's financial regulators are currently in talks about allowing spot bitcoin exchange-traded funds (ETFs) within the country.
Lee Bok-hyun, governor of the Financial Supervisory Service (FSS), technology/skorea-authorities-discuss-prospects-allowing-spot-bitcoin-etfs-2024-03-05/” target=”_blank” rel=”noopener”>revealed ongoing discussions within South Korean regulatory bodies.
In a recent radio interview, he highlighted that authorities are contemplating approval of bitcoin spot ETFs, and Lee noted mixed opinions within regulatory bodies.
He emphasized an optimistic stance toward virtual assets against a backdrop of more cautious outlooks from other officials.
The discussion over the approval of bitcoin spot ETFs in South Korea takes place amid the country's frontier efforts toward technological innovation.
However, the decision-making process is complicated by differing opinions within the regulatory community and concerns about bitcoin's classification under current financial laws.
Previously, in January, financial authorities indicated a lack of intention to regulate bitcoin ETFs, but the issue of brokerage sales of these ETFs under the Capital Markets Act has sparked increased scrutiny.
Going forward, Lee anticipates engaging the public on this issue, especially in light of expected regulatory developments related to virtual assets later this year.
The commitments of the Financial Supervisory Service extend beyond internal dialogues; A formal consultation with the US Securities and Exchange Commission (SEC) is planned for May. This upcoming discussion will deliberate on advanced financial instruments, specifically non-fungible tokens (NFTs), and the classification of bitcoin spot exchange-traded funds (ETFs) as virtual assets within regulatory frameworks.
The discussion also follows the People Power Party's decision in South Korea to indefinitely postpone its plans to relax cryptocurrency regulations. This pause has affected the proposal to lift the ban on domestic spot bitcoin exchange-traded funds (ETFs). According to local media reports, this decision is rooted in the challenges of achieving consensus between the government and financial institutions regarding the cryptocurrency policy framework.
Globally, interest in bitcoin ETFs has seen a significant increase, especially after the US SEC approved the first spot bitcoin ETFs on January 10. This decision caused a substantial increase in investments, with recent data showing an increase in spot bitcoin ETF inflows into the US. On March 4, these inflows reached $588 million, a significant increase from previous figures. Major financial institutions such as Fidelity and BlackRock reported inflows exceeding $400 million each, with only the Grayscale bitcoin Trust experiencing notable outflows.
Meanwhile, South Korean regulators are also stepping up their scrutiny of digital platforms due to privacy concerns. On March 4, South Korea's Personal Information Protection Commission announced its decision to investigate Worldcoin (WLD) after reports emerged of potentially unlawful processing of personal information, such as iris data, without individuals' consent.
