"Gift ETFs to Trade as Currently"
The financial authorities have reaffirmed their position that domestic financial companies mediating Bitcoin spot exchange-traded funds (ETFs) recently approved in the United States may be in violation of the law.
According to the financial authorities on the 14th, the Financial Services Commission decided not to further review the proposal for domestic investors to invest in Bitcoin spot ETFs listed overseas or the necessity of launching Bitcoin spot ETFs domestically.
Although the approval of Bitcoin spot ETFs in the United States on the 11th sparked interest in the possibility of mediating and launching Bitcoin spot ETFs domestically, the financial authorities have reaffirmed their stance against it.
In a press release issued that day, the Financial Services Commission stated, "The United States has a different legal system from ours, so it is not easy to directly apply the U.S. case to our country," adding, "This issue is directly related to the stability of the financial market, the soundness of financial companies, and investor protection, so we are examining it carefully."
On the 11th, the Financial Services Commission had issued an authoritative interpretation that mediating Bitcoin spot ETFs listed overseas by domestic securities firms could violate the Capital Markets Act.
At the same time, they had stated that since the Act on the Protection of Users of Virtual Assets will be implemented in July this year and there are overseas cases such as in the U.S., they would conduct additional reviews.
The financial authorities initially planned to comprehensively review whether it would be permissible to sell ETFs launched in the U.S. domestically and whether there is a need to launch them in Korea, but it appears that their position was settled during the related discussions that investor protection is more important.
In the "Emergency Measures Related to Virtual Currency" issued in 2017 under the leadership of the Office for Government Policy Coordination and government ministries, the government prohibited financial institutions from holding, purchasing, acquiring as collateral, or investing in shares of virtual currencies.
After the announcement on the 11th of the approval of 11 Bitcoin spot ETFs in the U.S., the authorities suddenly conveyed a policy of disallowing investment in Bitcoin spot ETFs, causing confusion in the industry.
Since the 11th, domestic securities firms have temporarily suspended mediation of 11 types of Bitcoin spot ETFs listed on the New York Stock Exchange in accordance with the financial authorities' policy. They have also stopped mediating overseas-listed Bitcoin ETF products that they had previously traded, not only U.S. spot ETFs.
The Financial Services Commission stated, "Overseas Bitcoin futures ETFs will continue to be traded as they currently are, and there are no plans to regulate them differently at this time," adding, "If necessary in the future, we will maintain close communication channels to share the authorities' position consistently and promptly with the industry."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
