Just a week after South Korea’s Financial Services Commission (FSC) warned against trading the US-based spot Bitcoin BTC $41,173 exchange-traded funds (ETFs), the Presidential Office is urging the regulator to reconsider its position.
According to a local report from Maekyung, on January 18, the Office of the President of the Republic of Korea, also known as the Yongsan Presidential Office, requested that the FSC refrain from issuing a ‘do’ or ‘not’ directive for ETFs. In a rough translation, Tae-yoon Sung, head of the presidential policy office, said:
“We are attempting to modify our nation’s legal system appropriately or to determine whether events that occur overseas can be recognized in our country.”
Beyond the risks associated with trading ETF assets, South Korea is considering other low-risk aspects of the offering, according to Sung.
The FSC, South Korea’s primary financial regulator, issued a brief press release on Jan. 12 suggesting that domestic securities firms trading or brokering overseas-listed spot Bitcoin ETFs “may violate” the Capital Markets Act, which seeks financial innovation and fair competition in the country’s capital markets.
However, the statement also stated that the country’s cryptocurrency regulatory regime is still in its early stages and that the regulations would be reviewed as things progressed overseas.
Meanwhile, another South Korean financial regulator, the Financial Intelligence Unit (FIU), is said to be planning new regulations for digital asset mixing services.
According to a local report on Jan. 15, a FIU official stated that the discussions began in Korea when the United States imposed sanctions on cryptocurrency mixers. However, a final decision on such an enforcement is not expected soon.
Cryptocurrency mixing services protect investors’ privacy and reduce traceability by moving funds across multiple blockchains. As a result, South Korea’s FIU intends to use mixers to counter illegal money laundering operations.