South Korea’s Presidential Office Calls for Reconsideration of Stance on Spot Bitcoin ETFs

The Office of the President of the Republic of Korea has urged the Financial Services Commission (FSC) to reconsider its anti-ETF position following SEC approval in the United States. Just a week after the FSC cautioned against trading U.S.-based spot Bitcoin exchange-traded funds (ETFs), the Presidential Office is now advocating for a reassessment.

On Jan. 18, the Yongsan Presidential Office requested the FSC to avoid issuing a definitive directive for or against ETFs, according to a local report from Maekyung. Tae-yoon Sung, head of the policy office, stated:

“We are trying to make appropriate changes to the legal system of our country or consider whether foreign practices are suitable.”

Beyond the risks associated with trading ETF assets, South Korea is assessing other low-risk aspects of the offering, said Sung. The FSC, a principal financial regulator in South Korea, issued a brief press release on Jan. 12 suggesting that domestic securities firms trading or brokering overseas-listed spot Bitcoin ETFs “may violate” the Capital Markets Act, which seeks financial innovation and fair competition in South Korea’s capital markets. However, the statement also noted that the regulatory regime for crypto in the country is still in its established stages and would review the regulations as things develop overseas.

Meanwhile, another South Korean financial regulator, the Financial Intelligence Unit (FIU), is reportedly planning to introduce new regulations around digital asset mixing services. According to a local report on Jan. 15, an FIU official revealed that the discussions started in Korea when the U.S. introduced sanctions against crypto mixers. However, a final decision on such enforcement is not expected anytime soon. Cryptocurrency mixing services help investors maintain privacy and reduce traceability by moving funds across multiple chains. As a result, South Korea’s FIU intends to counter illegal money laundering operations via mixers.