DeFi

Bitcoin

Planet

Spot

<div class="intro-text">
 The Korea Institute of Finance, a South Korean think tank focused on finance and economics, has issued a warning against the approval of spot cryptocurrency exchange-traded funds (ETFs) in the country.
</div>
<a href="https://www.news1.kr/articles/5456226" rel="noopener noreferrer nofollow">According to local media</a>, one of the institute’s top researchers, Bo-mi Lee, argued in a recent paper that, based on global experiences, the risks and potential losses associated with spot Bitcoin and Ether ETFs outweigh their benefits.
Lee’s paper suggested that introducing spot crypto ETFs in South Korea could threaten financial stability. It warns that approval of these ETFs, coupled with rising digital asset prices, might lead to a significant influx of capital into the crypto market. This could result in inefficient resource allocation and exacerbate liquidity issues in financial markets. Additionally, companies’ financial health might suffer during crypto price declines.
Lee emphasizes the need for more comprehensive research into the potential impacts of spot crypto ETFs, arguing that the current understanding is insufficient to justify their introduction. The researcher points out digital assets’ high volatility and uncertain value, suggesting that incorporating them into institutional systems could mislead market participants into viewing them as “proven assets.”
Lee’s paper concludes by calling for stringent regulatory measures and sufficient safeguards to protect investors, given the growing size and complexity of virtual assets. Lee stresses that without well-prepared regulatory measures, the risks associated with virtual asset-based ETFs could escalate, potentially impacting investors and the broader financial market.
This caution comes as South Korea’s financial regulator tightens rules on crypto assets.<a href="https://defi-planet.com/2024/02/south-korea-sets-july-18-2024-for-full-implementation-of-its-new-crypto-regulations/" rel="noopener noreferrer nofollow"> Starting July 19,</a> registered crypto exchanges must evaluate the tokens listed on their platforms, potentially leading to delistings among over 600 crypto assets under review.
Meanwhile, the regulators are also facing<a style="color: #0000ff;" href="https://defi-planet.com/2024/05/south-korea-under-pressure-to-follow-u-s-lead-in-approving-crypto-etfs/" rel="noopener noreferrer nofollow"> increasing pressure to approve crypto ETFs</a> following the U.S. Securities and Exchange Commission’s (SEC) approval of Bitcoin and Ethereum ETFs. Some experts have even predicted that the U.S. SEC’s decision might prompt the Financial Services Commission (FSC) to reconsider its initial reluctance.
The ruling People Power Party (PPP) has also<a style="color: #0000ff;" href="https://defi-planet.com/2024/02/south-koreas-ruling-party-pledges-to-permit-spot-bitcoin-etfs-as-general-elections-approach/" rel="noopener noreferrer nofollow"> expressed interest in exploring</a> the legalization of spot Bitcoin ETFs and establishing a “Digital Asset Promotion Committee” for sector regulation.
&nbsp;
If you want to read more news articles like this, visit <a style="color: #0000ff;" href="https://defi-planet.com/" rel="noopener noreferrer nofollow">DeFi Planet</a> and follow us on <a style="color: #0000ff;" href="https://twitter.com/PlanetDefi" rel="noopener noreferrer nofollow">Twitter</a>, <a style="color: #0000ff;" href="https://www.linkedin.com/company/defi-planet/" rel="noopener noreferrer nofollow">LinkedIn</a>, <a style="color: #0000ff;" href="https://www.facebook.com/DeFi-Planet-129907662611402" rel="noopener noreferrer nofollow">Facebook</a>, <a style="color: #0000ff;" href="https://www.instagram.com/defi.planet/" rel="noopener noreferrer nofollow">Instagram</a>, and <a style="color: #0000ff;" href="https://coinmarketcap.com/community/profile/DeFiPlanet/" rel="noopener noreferrer nofollow">CoinMarketCap Community</a>.
“Take control of your crypto portfolio with MARKETS PRO, DeFi Planet’s suite of analytics tools.”
The post <a href="https://defi-planet.com/2024/06/south-korean-think-tank-warns-against-approving-spot-crypto-etfs-cite-potential-market-disruptions/" rel="noopener noreferrer nofollow">South Korean Think Tank Warns Against Approving Spot Crypto ETFs, Cite Potential Market Disruptions</a> appeared first on <a href="https://defi-planet.com" rel="noopener noreferrer nofollow">DeFi Planet</a>.

South Korean Think Tank Warns Against Approving Spot Crypto ETFs, Cite Potential Market Disruptions

DeFi Planet

Other articles published on Jun 24, 2024

Solana and Tron Recover, but Traders Gravitate To This New Altcoin With 100x Growth Potential

Bitcoin ETFs Experience $544M Outflow, Signals ‘Real Correction’ According to CoinShares

ECB Reveals Privacy Plans for Digital Euro in First Progress Update

Day-to-Day Crypto Payments with SpacePay (SPY) – Here’s How It Works

Bitwise Spot Ether Trading: NFT Enthusiasts Can Now Mint Official Ad as a Digital Collectible

Trezor Issues Important Warning: What's Happened?

Join our free newsletter for daily crypto updates!