South Korea's chief financial watchdog, the Financial Services Commission (FSC), has issued a caution to local firms against facilitating the trading of spot Bitcoin Exchange Traded Funds (ETFs) from the United States.
In a press release on January 12, the FSC highlighted potential legal issues, stating that domestic brokerages dealing with overseas-listed spot Bitcoin ETFs might be at odds with the government's current policy on virtual assets and the Capital Markets Act.
The FSC acknowledged that South Korea's cryptocurrency regulatory framework is still in development. Consequently, the commission is considering revising its regulations in light of developments abroad, especially in the United States. This comes after the U.S. Securities and Exchange Commission (SEC) approved the trading of a spot Bitcoin ETF on January 10, with trading commencing on January 11.
10 spot Bitcoin ETFs experienced a combined trading volume exceeding $4.5 billion on their first day. Investment manager Timothy Peterson from Cane Macro estimated that ETF purchases equated to about 47,000 Bitcoin, valued at $2.1 billion, which would need acquisition through the spot market.
Looking ahead, the focus shifts to a potential spot Ethereum ETF. For instance, BlackRock applied for an Ethereum spot ETF in November 2023. With the SEC's decision deadline set for May 23, 2024, many in the crypto community are optimistic, believing the successful launch of a Bitcoin spot ETF could signal favorable prospects for an Ethereum ETF.
