Ban on Bitcoin ETF Trading Brokerage? ... Opposition Expert Says "Misinterpretation of the Capital Markets Act"

Assistant to Kim Seong-young: "Bitcoin is El Salvador's legal tender, qualifies as foreign currency"

The opposition party has criticized the Financial Services Commission's ban on domestic securities firms from brokering Bitcoin spot ETF trades, arguing that it is a misinterpretation of the Capital Markets Act. Unlike other virtual assets, Bitcoin qualifies as legal tender in El Salvador and thus corresponds to foreign currency, allowing securities firms to broker it.

On the 16th, Kim Seong-young, an aide known as a capital market expert (from the office of Democratic Party lawmaker Lee Yong-woo), stated on social media (SNS), "On the morning of the 11th, the U.S. Securities and Exchange Commission (SEC) approved Bitcoin spot exchange-traded funds (ETFs), but in the afternoon, the Financial Services Commission announced a ban on domestic securities firms brokering Bitcoin spot ETF trades, causing significant market confusion," and added, "The Financial Services Commission's recent interpretation is a misinterpretation."

Aide Kim explained, "The Financial Services Commission seems to have judged that Bitcoin spot is not an underlying asset under the Capital Markets Act, and therefore Bitcoin spot ETFs may violate the Capital Markets Act," but he also noted, "Unlike other virtual assets, since September 2021, Bitcoin has been recognized as legal tender in El Salvador, which qualifies as foreign currency under the Capital Markets Act, thus an underlying asset." He further stated, "It can also be considered a risk related to natural, environmental, or economic phenomena for which prices can be reasonably and appropriately calculated," concluding, "Bitcoin spot ETFs are financial investment products that securities firms can broker under the Capital Markets Act."

Additionally, Aide Kim said, "Securities companies have already been brokering Bitcoin spot ETF trades listed in Germany and Canada, as well as Bitcoin futures ETFs," and added, "In the cases of Germany and Canada, the ban on domestic securities firms brokering Bitcoin spot ETFs only came after the U.S. approved them, which violates the principle of trust protection."