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Thursday, April 18, 2024

South Korean Government May Soon Rethink the Hostility of Bitcoin ETFs: Report

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Following its initial hostile outlook on the spot Bitcoin exchange-traded fund (ETF), the South Korean government may be giving a second thought to its stance on the financial product.

This movement is driven by comments from Sung Tae-yoon, the recently appointed South Korean Presidential Chief of Staff, and an analysis from the Industrial Bank of Korea (IBK).

S. Korea to Rethink ETF Stance?

Since 2017, the South Korean government has maintained a somewhat unfriendly stance towards certain aspects of the crypto industry and other similar products. To protect investors, the country’s financial regulator has imposed strict guidelines on financial companies seeking to invest in the asset class.

Even after the United States Securities and Exchange Commission (SEC) approved the much-expected spot Bitcoin ETF, the South Korean government doubled down on its hostile stance. According to an official from the country’s Financial Services Commission (FSC), the U.S. SEC’s decision does not influence the agency’s commitment to prohibit virtual assets.

As revealed in a local report, comments from Sung Tae-yoon in a recent briefing may now trigger a rethink of the FSC’s stance. Stressing that the country needs to align its outlook on virtual assets with international standards, the Presidential Chief of Staff mentioned in his comment:

“We have told the Financial Services Commission, the responsible ministry, not to have a specific direction of ‘yes or no’. [. . .] We are further examining how we can prevent [products like the spot Bitcoin ETF] from becoming a side effect or risk factor for other financial products or the real economy while still having another investment asset element.”

IBK Shows Interest in BTC and ETH Products

Possibly capitalizing on the recent turn of events, Kim In-sik, a researcher for IBK Securities, a global financial investment company, speculated that demand for investment vehicles like the spot Bitcoin ETF “will be solid.”

The researcher added that the investment company is positioning itself as an issuer of the futures Ethereum ETF through an event-driven strategy.

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