South Korea’s Financial Services Commission is considering the approval of Bitcoin ETFs through a new advisory committee.
South Korea Forms Virtual Asset Committee for Crypto Oversight
South Korea’s Financial Services Commission (FSC) has created a Virtual Asset Committee to evaluate the approval of Bitcoin exchange-traded funds (ETFs) and strengthen crypto industry regulation. Announced on October 10, this move highlights the government’s increasing focus on crypto oversight. The committee, headed by FSC Vice Chairman Soyoung Kim, includes government representatives and private sector experts.
Committee’s Role and Objectives
The Virtual Asset Committee will provide oversight and guidance to ensure the stability of South Korea’s digital asset sector. Its main goal is to address issues like the approval of corporate accounts and crypto ETFs. These ETFs remain banned under current South Korean laws, specifically the Capital Markets Act, due to anti-money laundering concerns.
Introducing the Digital Asset User Protection Foundation
Alongside the committee, the FSC has launched the Digital Asset User Protection Foundation. This non-profit aims to help users recover assets when crypto service providers shut down. The FSC also reviews renewal applications for service providers whose registrations expire in 2024.
FSC Focuses on Monitoring and Fair Practices
The FSC remains committed to strengthening its monitoring systems, focusing on preventing unfair trading practices in the crypto space. Chairman Kim Byung-hwan emphasized these efforts at the National Assembly, citing the need for a robust system that ensures user protection.
Kimchi Premium and Bitcoin ETF’s Role
Ki Young Ju, CEO of CryptoQuant, noted that approving Bitcoin ETFs could reduce the “Kimchi premium” in South Korea. The Kimchi premium refers to the phenomenon of higher crypto prices in the country due to increased demand. With ETF approval, arbitrage mutual funds and market makers could help stabilize this price disparity.
Future of Crypto Regulation in South Korea
The FSC plans to roll out the second phase of crypto legislation, adding more regulations for service providers. These measures are part of the agency’s broader goal to ensure a secure regulatory framework that fosters crypto market growth while protecting users.
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