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Bitcoin:
$ 66.194
BTC Dominance:
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Market Cap:
$2.38 T

US ETH ETF Approval Puts Pressure on Korean Regulators

Bank Of Korea Interest Inflation

Korean regulators are facing increasing pressure to approve cryptocurrency exchange-traded funds (ETFs) after the US Securities and Exchange Commission (SEC) approved spot Ethereum exchange-traded funds (ETFs).

According to local media, the SEC’s decision on Ethereum will put pressure on Seoul’s financial regulators to reconsider their stance on digital assets.

On May 24, 2024, the SEC green-lighted the creation of ETFs for Ethereum, the world’s second-largest cryptocurrency, and this follows its approval of Bitcoin ETFs in January 2024.

ETFs are financial instruments that provide investors with exposure to a range of securities. The approval of crypto ETFs marks a significant step towards bridging the gap between traditional finance and the digital asset industry.

Unlike their U.S. counterparts, the Korean Financial Services Commission (FSC) and Financial Supervisory Service (FSS) are cautious about promoting cryptoasset trading in traditional securities markets.

According to the FSC, ETFs must strictly comply with the Capital Markets Act, which requires them to be linked only to traditional underlying assets. These assets include established financial instruments, securities, international currencies and commodities that form the basis of financial derivative products.

The Financial Services Commission is a government agency that supervises and regulates financial institutions and financial markets in South Korea. The South Korean government released an update to the Virtual Asset User Protection Act in early February.

According to a report by the Korea Times, leading Seoul-based digital currency data provider Xangle has opposed the ban on digital assets in the traditional securities market, calling the ban “outdated” and stating that modern finance should be overhauled to match the growing importance of digital assets.

READ:  Former SEC Chairman Clayton Evaluates Ethereum ETF Decision

“Under these circumstances, the SEC’s decision on Ethereum on Thursday will force Seoul’s financial regulators to reconsider their regulations on digital assets.”

Korean Shareholders Association President Jung Eui-jung emphasized the importance of Seoul following the US and approving Bitcoin and Ethereum ETFs, noting that the current hesitancy creates a disappointment that extends beyond the crypto sector.

Jung warned that investors could shift funds to U.S. markets if Seoul regulators do not continue to make progress as the U.S. moves ahead, saying it will be “a matter of time” before the U.S. fully opens the door to other less-traded cryptocurrencies.


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