South Korea and regulation: will the ban on spot crypto ETFs be abolished?

Twist in South Korea, where the new financial regulatory committee dedicated to cryptocurrencies might abolish the current ban on spot crypto ETFs. 

South Korea and the new regulatory committee to discuss the ban on spot crypto ETFs

In South Korea there might be a change of scenario regarding the current ban on spot crypto ETFs. The new crypto committee of the FSC, the country’s financial regulatory authority, is considering what to do. 

According to what reported, it seems that the new committee for cryptocurrencies, a recently formed advisory group to discuss policies on digital assets, will review the current ban.

This softer approach compared to the rigidity of the past, comes after the legislators requested a change. 

In fact, the FSC had reiterated its strict stance on not wanting to approve spot Bitcoin ETFs last January, when instead they were given the green light in the USA. This position was meant to convey the message of absolutely not wanting to follow in the footsteps of the United States.

Until today, in South Korea, local financial institutions are prohibited from owning and purchasing crypto. Not only that, it is also forbidden to invest in companies that offer cryptocurrencies. 

As a result, the country has always remained firm on the idea that it was prohibited to issue and launch ETFs on Bitcoin and on Spot crypto. 

Yet, today something is changing. From what has emerged, in fact, it seems that the different parties have promised the approval of local bitcoin ETFs in their general election campaigns, right at the beginning of this year.

South Korea and the regulation to approve spot crypto ETFs

Already last April, after the victory of the democratic party in South Korea there was talk of preparation for what would be the abolition of the ban on spot crypto ETFs.

At that moment, it was said that such an introduction would mean a historic moment for the country but also for the entire crypto market in Asia. 

In fact, this move would represent a wider acceptance and integration of cryptocurrencies into the country’s rigid financial system. 

Today, with the establishment of the new internal committee of the FSC, dedicated solely to cryptocurrencies, the promise of the election campaign might perhaps become a reality. 

NFTs mass-produced like regular crypto

Remaining in the context of crypto regulation in South Korea, last June new guidelines were established involving Non-Fungible Tokens. 

In fact, it seems that some NFTs will be treated like regular crypto, introducing a regulatory framework intended to govern the growing market of mass-produced NFTs. 

In practice, the new guidelines of the FSC will be applied to NFTs produced in series that will be traded like normal crypto. Specifically, the trading of such NFTs must comply with anti-money laundering (AML) regulations and KYC requirements, in order to prevent the misuse of these digital assets. 

Series-produced NFTs are all NFTs created in large quantities and intended for frequent exchange.