South Korea’s Financial Supervisory Service (FSS), the nation’s primary financial regulator, is setting its sights on the United States for guidance on the intricacies of spot Bitcoin exchange-traded funds (ETFs).
With a mission to oversee financial institutions, the FSS operates under the larger umbrella of the Financial Services Commission. In a significant move, FSS chief Lee Bok-Hyun announced a detailed business strategy for the coming year during an event in Seoul on Feb. 5, highlighting plans for engagements with major financial markets, notably New York, to further discussions on the South Korean financial landscape, including the pivotal topic of spot Bitcoin ETFs.
This announcement follows the U.S. Securities and Exchange Commission’s (SEC) climacteric approval of the first spot BTC ETFs in January, marking a historical shift in the regulatory stance towards cryptocurrency investments. The SEC had previously declined applications for spot BTC ETFs, citing concerns about market manipulation risks due to the crypto market’s relatively small size.
However, on Jan. 10, the SEC reversed its stance and approved 11 spot BTC ETFs. This change has sparked a global reconsideration of spot Bitcoin ETFs, with South Korea being no exception.
Lee Bok-Hyun, in his business plan, revealed his plans to meet with SEC Chair Gary Gensler later in the year to deliberate on various matters, including digital assets and spot Bitcoin ETFs. The dialogue is expected to touch on the SEC’s recent policy decisions regarding spot Bitcoin ETFs and their broader impact on global financial policies.
The FSS chief underscored the importance of this engagement, noting the significant influence of the SEC’s policies on the international stage.
The move by the FSS signals a potential shift in South Korea’s regulatory approach. Previously, the Korean securities regulator had cautioned local firms against engaging in brokering activities for U.S.-based spot Bitcoin ETFs, citing potential conflicts with existing regulations. However, the regulator also indicated a willingness to revisit and possibly update its stance on the approval process for spot Bitcoin ETF trade in the United States.
South Korea, a leading cryptocurrency market regulator in the Asia-Pacific region, has historically aligned its crypto regulatory framework closely with that of the U.S. For instance, this includes implementing measures such as banning credit card use for crypto purchases and outlawing crypto mixing services.