cryptonews.com
While the US has finally approved a decade-long wait for Bitcoin exchange-traded funds (ETFs), South Korea still stands firm in banning BTC ETFs.
South Korea’s Financial Services Commission (FSC) said that the launch of virtual currency ETFs is “impossible” and that “nothing will change.”
The country has currently banned banks and financial institutions from buying and owning cryptos. The FSC cited concerns regarding “illegal outflow of domestic funds overseas due to credit card payments on foreign crypto exchanges.”
The nationwide ban follows a recent investigation by the Anti-Corruption and Civil Rights Commission in South Korea that uncovered substantial crypto trading activities among the country’s lawmakers.
Per a regional news report, an FSC official told a reporter that the ban is to “stabilize” the financial markets.
“The government has consistently maintained the principle of prohibiting financial institutions from investing in virtual assets in order to stabilize the financial market and protect investors. There are no enemies.”
Further, the official cited few jurisdictions such as the United States, Hong Kong, and Germany, which have already launched crypto futures ETFs or spot ETFs.
“It is difficult to regard it as a new incident. Legally, it is impossible to launch a virtual asset ETF,” the officer added.
Additionally, country’s Article 4 of the Capital Markets Act lists only financial investment products, currencies, and general products as underlying assets for ETFs.
In a significant move, the US Securities and Exchange Commission (SEC) on Wednesday approved the listing and trading of several spot Bitcoin ETFs, opening the door to cryptos for many new investors.
Commenting on this, the South Korean FSC official noted that the US financial sector did not collapse when the crypto industry plummeted because it prohibited banks and financial institutions from investing in virtual assets (like Korea).
“The SEC also reluctantly allowed virtual asset ETFs on a limited basis in response to the court decision. If investment in virtual assets is recognized, the demand base of the domestic stock market may actually weaken.”