South Korea’s Financial Watchdog To Review Ban On Spot Crypto ETFs

Updated: 10 October 2024

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South Korea’s top financial regulator announced that it will consider lifting the country’s ban on spot crypto ETFs (exchange-traded funds).

The Financial Services Commission (FSC) said in a report for its annual audit on Oct. 9 that its new crypto committee will review the ban, according to local news agency News1.

This could signal a potential shift in the regulator’s opposition to the traditional financial markets being exposed to digital assets.

Legislators Push To Get South Korean Ban On Crypto ETFs Lifted

After spot Bitcoin ETFs got the greenlight in the US at the start of the year, the financial watchdog chose to keep the ban on local crypto ETFs. Risks to stability in traditional financial markets were cited as the reasoning behind the decision.

Meanwhile, South Korean legislators have been calling for a change in the regulator’s policy. Earlier this year, both the ruling Democratic Party and the opposition party pledged the approval of local spot Bitcoin ETFs. The Democratic Party also said that it would ask the FSC to review its ban.

Upbit Under Investigation For Alleged Monopoly

The FSC has has also launched an antitrust investigation into leading South Korean exchange Upbit. The investigation, confirmed during the regulator’s annual audit, follows comments from Democratic Party of Korea lawmaker Lee Kang-il, who said Upbit’s monopoly has been enabled through its partnership with K Bank.

The exchange also accounts for a substantial portion of the bank’s deposits, the lawmaker added.

🦉: South Korea Opens Antitrust Investigation Against #Upbit Exchange

⚖️South Korea has always been strict with the #crypto market, but this measure can promote innovation and healthy competition in the virtual asset market

Learn more▶️https://t.co/L07PLjWoGt #OWLX #AI… pic.twitter.com/zFw0FlcySP

— OwlX.ai (@OwlX_ai) October 10, 2024

“Out of K Bank’s 22 trillion won in deposits, Upbit deposits account for 4 trillion won,” local media reported, citing Lee. The lawmaker subsequently warned of a bank run if Upbit’s transactions are cut off.