Korean Democratic Party Urges FSC to Reevaluate its Stance on Bitcoin ETFs
Summary:
The Korean Democratic Party urges the Financial Services Commission (FSC) to reconsider its stance on spot Bitcoin (BTC) exchange-traded funds (ETFs). The party, holding the majority in the National Assembly, plans to initiate this request come June, following their campaign promise to support the inclusion of virtual assets in ETFs. This proposal comes after the FSC claimed that featuring foreign spot BTC ETFs could breach the Capital Markets Act. If the FSC’s explanation is deemed insufficient, the party may consider revising the Capital Markets Act, which currently doesn't include virtual assets in its definition of underlying assets. As a part of the ongoing revision, the second phase of the 2020 Virtual Asset Business Rights Act will also be discussed later this year.
According to recent reports, the Korean Democratic Party is urging the Financial Services Commission (FSC) to revisit its stance on spot Bitcoin (BTC) exchange-traded funds (ETFs), in light of its campaign promises supporting the inclusion of virtual assets in ETFs. Rather than keeping this promise after its victory in the April elections, where it currently holds 175 out of 300 seats in the National Assembly, the party plans to put forward this request after the Assembly convenes in June.
On January 12, the FSC made it clear that domestic securities firms might breach the Capital Markets Act by featuring foreign spot BTC ETFs, given that the U.S. Securities and Exchange Commission approved trading for these types of ETFs just two days earlier. However, this official viewpoint was not welcomed with open arms, and the previous presidential administration urged the FSC on January 18 to rethink their decision.
A member of the party's policy committee disclosed in The Korea Economic Daily that if the FSC's explanation for its decision is unsatisfactory, the party may consider adjusting the Capital Markets Act. The Act, as it currently stands, does not incorporate virtual assets in its definition of underlying assets. However, any amendment to the Act would necessitate a complex process likely to take several months.
As indicated by the official, discussions set to commence in the latter part of the year will focus on the second phase of the Virtual Asset Business Rights Act of 2020. Despite the underwhelming performance of similar exchange-traded funds in Hong Kong that started trading Bitcoin and Ether on April 30, it has boosted expectations for the formation of a comparable market in South Korea.
Since the introduction of the 2020 act, the South Korean authorities have tightened their regulation of the cryptocurrency market. By 2024, more stringent penalties for crimes related to cryptocurrencies will be implemented, along with the issuance of new guidelines for cryptocurrency exchanges.
Published At
5/7/2024 9:01:50 PM
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