In response to the recent approval of around a dozen Bitcoin exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC), South Korea has issued a warning to curb potential speculative investments flowing into these instruments. The Financial Services Commission (FSC), the country’s securities regulator, announced on Thursday that brokering such ETFs might contravene the existing government stance on virtual assets and its capital markets law. This pronouncement has led to confusion and a significant impact on various stocks, with Wizit Co. experiencing a notable 13% decline, along with a broader downturn in crypto-related stocks during early Friday trading.
This cautious move by a major regulator comes at a time when South Korea, known for its enthusiasm for crypto assets, is navigating the aftermath of a more than $40 billion collapse involving tokens created by Do Kwon. Last year, the country approved a digital assets bill aimed at enhancing investor protection, reflecting a growing concern for consumer safeguards.
The FSC has indicated its intention to conduct a comprehensive review of digital-asset regulations, especially in light of evolving overseas regulatory frameworks. Meanwhile, the debut of the batch of US spot Bitcoin ETFs, featuring offerings from industry giants like BlackRock Inc. and Fidelity Investments, saw an energetic start on Wall Street, with approximately $4.6 billion worth of shares changing hands. Proponents of these ETFs believe they could serve as a key driver for broader mainstream adoption by everyday investors, potentially catalyzing further market gains.
