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RegulationsKorea's FSC Blocks Local Brokers from Overseas Spot Bitcoin ETFs

Korea’s FSC Blocks Local Brokers from Overseas Spot Bitcoin ETFs

The Financial Services Commission (FSC) of South Korea announced on January 12 that domestic securities firms are prohibited from offering spot Bitcoin exchange-traded funds (ETFs) overseas, citing potential violations of the government’s stance on virtual assets. Despite this ban, the FSC hinted at the possibility of reviewing its regulatory approach to cryptocurrencies without providing specific details.

As a result of these restrictions, local securities firms, including Mirae Asset Securities and Samsung Securities, suspended transactions for clients in Canada and Germany related to spot Bitcoin ETFs. For example, Mirae Asset Securities halted trading of its Purpose Bitcoin ETF, listed on the Canadian stock exchange since February 2021, which had been trading without restrictions until these recent changes.

While the U.S. Securities and Exchange Commission (SEC) granted approval for spot Bitcoin ETFs, a South Korean FSC official emphasized that there has been no review to alter the government’s policy on virtual asset investment by financial institutions. South Korea has maintained a strict stance on cryptocurrencies since December 13, 2017, when emergency measures were introduced, prohibiting financial institutions from holding, purchasing, using as collateral, or investing in cryptocurrencies.

On January 10, the SEC approved multiple spot Bitcoin ETFs for listing on all registered national exchanges in the U.S., including Nasdaq, NYSE, and CBOE. Despite this approval, SEC Chair Gary Gensler cautioned investors about the risks associated with Bitcoin and related products, emphasizing that the agency did not endorse or approve Bitcoin.

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