Spot Bitcoin ETF approval by the SEC has already impressed investors and many prominent figures, as it has many advantages for investors and institutional investors too. But these achievements by the crypto industry don’t seem to impress Korean regulators, as the country’s Financial Services Commission Kyunghyang told a local news channel that the approval of spot bitcoin ETFs in the U.S. is not a major event for them, which will result in their decision to ban cryptocurrencies.
The Reason Behind Ban on Selling and Buying Crypto
The major reason behind the prohibition on crypto is that the regulators are against illegal outflows of domestic funds, money laundering, and the encouragement of speculative behavior, which might result in losses for investors.
Recently FSC plans to get feedback for the proposed step by the government which will last until Febuary 13. They will count this public feedback as pivotal which will be reviewed in the first half of 2024.
As part of its mission to oversee and regulate the crypto industry, the Financial Services Commission (FSC) has proposed a ban on the use of credit cards to purchase digital currencies. In addition to this limitation, the FSC has also proposed rules to protect users of cryptocurrency exchanges.
These rules specify that exchanges must store at least 80% of their customers’ deposits in cold wallets and charge fees to customers who withdraw funds from their deposits. These measures are intended to safeguard investors and encourage responsible practices within the crypto industry.
South Korea’s Ongoing Strategies
South Korea is in the process of developing two different regulations. The first plan was processed last year itself and the second will take effect in July 2024. Both plans aim to set transparent rules regarding issuing for listing and delisting of cryptocurrencies.
The financial authorities of South Korea have a solid negative stance on virtual assets.
“The reason the U.S. financial sector did not collapse when the virtual asset market plummeted was because it prohibited financial institutions from investing in virtual assets (like in Korea),” adding, “The SEC also reluctantly allowed virtual asset ETFs on a limited basis in response to the court decision. “If investment in virtual assets is recognized, the demand base of the domestic stock market may weaken,”
Financial Regulator
Apart from this, Gary Gensler stated that even after approving applications for spot Bitcoin ETFs, they have approved ETFs but do not intend to approve or endorse Bitcoin.
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