South Korea's Financial Services Commission (FSC) has announced plans to reassess its ban on local spot crypto exchange-traded funds (ETFs).
South Korea's Financial Services Commission (FSC) has announced plans to reassess its ban on local spot crypto exchange-traded funds (ETFs) and institutional trading accounts on crypto exchanges.
This decision follows the establishment of a new crypto committee intended to evaluate digital asset policies.
According to a report from the local news agency News1, the FSC's new crypto committee, a recently formed advisory group tasked with discussing digital asset policies, will lead the review process. The announcement was made during the regulator's annual audit on Thursday.
The decision to revisit the existing ban on spot crypto ETFs marks a departure from the FSC's previous stance, which had firmly opposed the introduction of such financial instruments due to concerns over financial market stability.
However, the regulator's position appears to have evolved, particularly in light of the recent approval of spot Bitcoin ETFs in the United States.
South Korea's legislators have been vocal in their calls for change, with both the winning Democratic Party and the opposition party pledging to support the approval of local spot Bitcoin ETFs during their general election campaigns earlier this year.
The winning left-wing party reportedly announced in May that it would request the FSC to review the ban.
In addition to the crypto ETF review, the FSC chair, Kim Byung-hwan, also stated that the regulator would investigate the monopolistic structure of South Korean digital asset exchanges, with Upbit dominating the market.
Kim's statement came in response to concerns raised by Democratic Party lawmaker Lee Kang-il, who highlighted the significant financial relationship between Upbit and its partner bank, K-bank.
Lee expressed concerns about Upbit's substantial influence on K-bank, noting that Upbit deposits made up 20% of K-bank's total deposits. The lawmaker warned of a potential bank run if Upbit and K-bank's partnership were disrupted, as K-bank prepares for an initial public offering (IPO).
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