Two major South Korean securities firms have suspended transaction services of foreign spot Bitcoin ETFs.
Following an announcement from South Korea’s Financial Services Commission, the country’s top financial watchdog, Samsung Securities and Mirae Asset Securities halted new transactions of foreign spot Bitcoin ETFs offered on their platforms.
“Domestic securities firms brokering overseas-listed Bitcoin spot ETFs may violate the existing government stance on virtual assets and the Capital Markets Act,” the announcement read.
The announcement timing is likely related to the United States’ Securities and Exchange Commission’s approval of spot Bitcoin ETFs on Wednesday, as a Financial Services Commission (FSC) official told local media on Thursday that the SEC’s decision would not influence the regulator to reconsider its ban on South Korean financial institutions from releasing their own cryptocurrency ETFs.
Local South Korean news outlet Dailian was the first to report that Samsung Securities and Mirae had suspended transactions of foreign Bitcoin ETFs. Samsung Securities managed about $220 billion worth of assets at the end of 2022, while Mirae had about $215 billion in assets under management at the end of June 2023.
Mirae confirmed with The Block that the company had halted transactions of foreign spot bitcoin ETFs, along with several others Korean financial institutions. A Mirae spokesperson noted that the FSC’s announcement was the main factor for the suspension, as South Korean financial institutions are now worried that offering foreign Bitcoin ETFs could be seen as illegal by the Korean government.
However, the suspension will not affect the trading of foreign Bitcoin futures ETFs in Korea. Foreign Bitcoin futures ETFs were not mentioned in the FSC’s statement.
“Halting [bitcoin futures] ETFs has not been discussed,” the Mirae spokesperson told The Block.
Situation Is Subject To Change
In spite of the warning, the FSC indicated that it would be open to further review of the situation due to the ongoing establishment of regulations on virtual assets in the country.
“However, regulations on virtual assets are being established, such as the Act on the Protection of Users of Virtual Assets, etc., which went into effect in July of this year, and there are overseas cases such as the United States, so we plan to review them further,” the FSC concluded.
South Korea is in the process of developing a two-part regulation policy on crypto. The first part, enacted last year and set to come into effect from July, concerns legislation on virtual assets which will seek to bring crypto markets under regulatory control for investor protection.
The second part will now tackle rules surrounding the issuance, listing, and delisting of cryptocurrencies.