The Financial Supervisory Service of South Korea (FSS) has once again reaffirmed its prohibition on Bitcoin spot as well as futures Exchange Traded Funds (ETFs) which has drawn criticism from industry participants and legal practitioners.

This is part of overhauling regulations that have more or less kept the cryptocurrency market stunted particularly South Korea’s as compared to other advanced markets. The lack of FSS endorsement for such investment vehicles has major consequences to the financial scene of the country.

Regulatory Stance On Bitcoin Remains Firm

The FSS’s recent declaration demonstrates its continued commitment to stringent regulations governing cryptocurrency investments. Despite increasing global adoption of Bitcoin ETFs, South Korea remains hostile. The FSS has not only prohibited the development of Bitcoin spot and futures ETFs, but it has also restricted funds related to prominent cryptocurrency firms such as Coinbase.

This decision is based on measures implemented in 2017 to reduce the financial risks connected with virtual assets. However, detractors say that these regulations are out of date and lack legal basis in the contemporary situation.

An official at an asset management firm voiced frustration, noting: “We were ready to launch an ETF investing in Coinbase, but the FSS said we can’t for now.”

This opinion reflects a broader concern among financial organizations that South Korea is passing up lucrative investment prospects as other countries embrace cryptocurrency-related products.

Legal Concerns And Criticism

Legal experts have opined that the actions taken by the FSS are beyond its purview under the Capital Markets Act. According to Jeong Su-ho, an attorney with Renaissance Law Firm, excluding investments in public enterprises like Coinbase into a slate for prohibition has a strong legal basis.

He argues that while the FSS claims to protect investors, its method might be a case of regulat

Go to Source to See Full Article
Author: Christian Encila