South Korea’s financial watchdog is poised to review the approval of spot crypto ETFs and the legalization of corporate crypto accounts through a newly formed committee.

South Korea’s Cautious Approach to Crypto Regulation

South Korea, known for its cautious stance on crypto regulation, is now contemplating the approval of spot crypto exchange-traded funds (ETFs) and corporate crypto accounts through its newly established Virtual Assets Committee. This committee is chaired by the Financial Services Commission’s vice chairman and includes representatives from various government ministries and private-sector experts.

Current Status of Crypto ETFs in South Korea

While Bitcoin and Ethereum have secured approval from regulators for spot ETFs in the U.S. and Hong Kong, South Korea has yet to allow such products. Additionally, corporate crypto accounts remain prohibited. The report does not specify a timeline for when South Korean authorities will review the approval of crypto ETFs.

Regulatory Reforms and Market Evolution

The move comes as the Korean regulatory body faces increasing demands for reform in these areas due to the evolving domestic crypto market. Currently, the Financial Services Commission (FSC) is processing renewal applications for virtual asset service providers that first registered in 2021. This is part of the regulator’s efforts to amend the Specific Financial Information Act, aimed at enhancing oversight of market manipulation and unfair trading practices.

Phase 2 Legislation on the Horizon

The FSC has indicated it is considering “Phase 2 legislation,” which would focus on tighter regulatory controls for crypto businesses, including issuance and listing requirements. This follows the recent enactment of the Virtual Asset User Protection Act, introduced in July.

Balancing Market Growth with Investor Safeguards

South Korea has been gradually expanding its crypto oversight, aiming to balance market growth with investor protections. As a result, major domestic crypto trading platforms, such as Upbit, have come under increased scrutiny. The FSC recently investigated Upbit’s dominance and its ties with K Bank.

Upbit, which holds around 80% of the local market, is the country’s largest crypto exchange and ranks fifth globally by 24-hour trading volume.

South Korea’s regulatory landscape is undergoing significant changes to adapt to the growing crypto market. Stay updated with more news on Global Crypto News.

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