South Korean Presidential Office Urges FSC to Rethink Stance on Bitcoin ETFs; FIU Eyes Crypto Mixer Regulations
Summary:
South Korea's Presidential Office is urging the Financial Services Commission (FSC) to reassess its position on U.S.-based spot Bitcoin exchange-traded funds (ETFs). This follows the FSC's warning that domestic securities firms trading these ETFs may violate the country's Capital Markets Act. Meanwhile, the Financial Intelligence Unit (FIU) plans to implement regulations concerning digital asset mixing services. This effort is targeted at illegal money laundering activities. The decision regarding ETF trading and handling of crypto mixers will depend on future international developments.
Just seven days after the Financial Services Commission (FSC) of South Korea cautioned against dealing with the spot Bitcoin (BTC) exchange-traded funds (ETFs) based in the U.S., it is now being urged by the Presidential Office to reevaluate their position. The Yongsan Presidential Office—otherwise known as the Office of the President of the Republic of Korea—on Jan. 18, asked the FSC to forsake issuing a categorical ‘do’ or ‘don’t’ directive for ETFs, citing a Maekyung local report. The head of the policy office of the presidential office, Tae-yoon Sung, stated in paraphrase that they are en route to making necessary legal changes or to consider the acceptance of international occurrences within our borders.
The South Korea attempts to explore other less risky aspects of the offering than the risks involved with trading ETF assets, explained Sung. The FSC is South Korea's central financial regulator that, on Jan. 12, issued a concise press release implying that domestic securities firms dealing with or mediating overseas-listed spot Bitcoin ETFs could potentially “infringe” the Capital Markets Act—an act aimed at advancing financial innovation and maintaining fair competition within South Korean capital markets.
Nevertheless, the communication also highlighted that the regulatory framework for cryptocurrencies in the nation is still evolving and they will assess regulations as global developments unfold. Meanwhile, South Korea's other financial regulator, the Financial Intelligence Unit (FIU), has plans underway to roll out new rules regarding digital asset mixing services. As per a local report on Jan. 15, an FIU official disclosed that such deliberations arose in Korea following the U.S.'s sanction against crypto mixers. However, the final verdict regarding such enforcement isn't anticipated in the immediate future.
Crypto mixing services ensure investor privacy and limit traceability by transferring funds across various chains. As such, South Korea's FIU intends to combat unlawful money laundering activities by striking at mixers.
Published At
1/19/2024 8:29:42 AM
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