Bitcoin Spot ETF Brokerage Violates Capital Markets Act
"No Issues with Bitcoin Futures ETF"
The financial authorities have once again confirmed that brokering and launching Bitcoin spot exchange-traded funds (ETFs) domestically is not possible.
On the 14th, the Financial Services Commission (FSC) released a press reference stating, "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 closely." The FSC had previously issued a legal interpretation on the 11th that domestic securities firms brokering Bitcoin spot ETFs listed overseas may violate the Capital Markets Act.
According to the financial authorities, the FSC has decided not to conduct further review on the proposal for domestic investors to invest in Bitcoin spot ETFs listed overseas or on the necessity of launching Bitcoin spot ETFs domestically.
The financial authorities had planned to conduct a comprehensive review, including whether it would be permissible to sell ETFs domestically since they have been launched in the U.S., and whether there is a need to launch them domestically. However, during the related discussions, the position appears to have been settled that investor protection is more important.
In the 'Emergency Measures Related to Virtual Currency' announced in 2017 under the leadership of the Office for Government Policy Coordination and related government ministries, the government prohibited financial institutions from holding, purchasing, acquiring as collateral, or investing equity in virtual currencies. The reason was that investment in virtual currencies by regulated financial companies could stimulate speculative sentiment. Whether financial companies are allowed to hold virtual assets is expected to have been a key issue in this discussion as well.
Mirae Asset Securities and others, following the authorities' guidelines, have belatedly stopped trading Bitcoin spot ETFs listed on stock exchanges outside the U.S. prior to the SEC's approval of listing. KB Securities and others have banned purchases of Bitcoin futures ETFs starting from the 12th.
The FSC 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 ensure that the authorities' position is consistent and promptly shared with the industry."
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