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Tuesday, June 25, 2024

Change of Heart: South Korea to Discuss Spot Bitcoin ETFs With US SEC (Report)

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Speculation about the South Korean government rethinking its hostile stance on spot Bitcoin exchange-traded funds (ETFs) may be true, as the country’s financial regulator has officially indicated interest in the products.

A report from local media outlet Hankyung has revealed that the Financial Supervisory Service (FSS) of South Korea intends to meet with the United States Securities and Exchange Commission (SEC) to discuss the crypto industry and spot Bitcoin ETFs.

FSS to Meet U.S. SEC for Crypto ETF Talk

According to the report, FSS chief Lee Bok-hyun is expected to visit the U.S. later this year to meet with SEC chair Gary Gensler. He announced the visit on Monday while revealing his business plans for 2024 at the Financial Supervisory Service in Yeouido, Seoul.

The FSS director said he and Gensler would discuss Korea discount measures like spot Bitcoin ETFs and corporate value-up programs.

“I will meet with SEC Chairman Gary Gensler (this year), and there are areas where we will focus on issues such as virtual asset issues and Bitcoin spot ETF. Now, the impact of SEC policy on the world, this is important,” he stated.

A Possible U-Turn

Director Bok-hyun’s announcement comes less than a month after the SEC approved the first wave of spot Bitcoin ETFs in the U.S. The agency’s decision followed a decade of rejecting proposals brought by several asset management firms.

The South Korean government initially reaffirmed its commitment to maintaining the ban on crypto ETFs despite the SEC’s approval. Regulators in the country insisted that cryptocurrencies would not be recognized as financial assets and there would be no policy adjustments to favor the budding sector.

However, the country’s stance appeared shaky when Sung Tae-yoon, the recently appointed Presidential Chief of Staff, urged the South Korean Financial Services Commission (FSC) to align its crypto viewpoint with international standards by allowing investment vehicles like ETFs. He said having a yes or no stance was unnecessary, but allowing ETFs as investment elements was crucial.

With a possible U-turn around the corner, South Korean investment giants are speculating that demand for the products, if launched, would be “solid.”

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