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South Korean Crypto Standoff: Country’s Regulator Issues Warning Against US Bitcoin Spot ETF Brokerage

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South Korea’s Financial Services Commission (FSC) has recently issued a statement that could have significant implications for the local crypto market in its region.

The FSC has indicated that domestic securities firms’ brokering of US spot Bitcoin Exchange-Traded Funds (ETFs) might violate South Korea’s regulations concerning virtual assets and the Capital Markets Act.

This announcement came as a response to the US Securities and Exchange Commission’s (SEC) approval of spot Bitcoin ETFs, a decision the industry has long awaited.

South Korea’s Stance On Crypto

Notably, this FSC’s declaration on brokering US spot Bitcoin ETFs underscores the regulatory divergence between South Korea and the US in their approach to crypto ETFs.

While the US has made a landmark decision by allowing several exchange-traded funds tied to the spot price of Bitcoin to begin trading, after hesitations, South Korea maintains a stance that appears to be more cautious.

The regulator has also recently reiterated its intention to uphold the current restrictions on South Korean financial institutions investing in virtual assets, citing the “stability of financial markets and investor protection” as primary concerns.

A South Korea’s Financial Services Commission representative conveyed to a local media source that the US’s recent endorsement of spot Bitcoin ETFs would not influence the Korean regulatory body to revoke or reassess its current prohibition. The official particularly noted:

It’s hard to say that the SEC’s decision to approve a limited spot ETF is a new case (to the extent that it will change the [South Korea’s] domestic market).

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Author: Samuel Edyme

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