Benzinga - South Korea maintains its firm stance against recognizing virtual assets as financial assets and continues to prohibit financial institutions from investing in them.
In a recent discussion, an official from South Korea's Financial Services Commission reiterated the government's consistent principle of barring financial institutions from virtual asset investments to stabilize the financial market and safeguard investors.
Despite international trends, such as the U.S. Securities and Exchange Commission (SEC) greenlighting the listing and trading of spot Bitcoin (CRYPTO: BTC) exchange-traded funds (ETF), South Korea views the development as non-influential to its existing policies.
Under the current legal framework, launching a virtual asset ETF in South Korea is not feasible.
The Capital Markets Act specifies financial investment products, currencies and general products as the only permissible underlying assets for ETFs.
Also Read: SEC's Historic Bitcoin ETF Approval Reveals Deep Divide Within Commission
Financial authorities resist amending the law to include virtual assets as underlying assets for financial instruments like ETFs.
They believe the U.S. financial sector's resilience during the crypto market downturn was due to restrictions on financial institutions from investing in virtual assets, similar to Korea's approach.
SEC Chairman Gary Gensler clarified the SEC's decision to approve Bitcoin ETPs is confined to cash exchange-traded products holding Bitcoin and does not indicate a readiness to establish listing standards for virtual asset securities.
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