Democratic Party of Korea to Request Reconsideration of Spot Bitcoin ETFs Legal Status

The Democratic Party of Korea is pushing for the approval of spot Bitcoin exchange-traded funds (ETFs) in South Korea, despite the Financial Services Commission’s current stance against it. The party, which recently gained power in the April elections, plans to request a reconsideration of the FSC’s interpretation of the legal status of spot BTC ETFs.

According to a report from The Korea Economic Daily, the FSC had previously stated that domestic securities firms could violate the Capital Markets Act by listing foreign spot BTC ETFs. This decision was met with criticism, with the previous presidential administration urging the FSC to review its stance.

The Democratic Party aims to fulfill one of its campaign promises by allowing spot ETFs with underlying virtual assets. However, the process to amend the Capital Markets Act would be lengthy and require multiple steps. Discussions on the second stage of the 2020 Virtual Asset Business Rights Act are expected to begin in the second half of the year.

Despite the regulatory challenges, there is optimism for the creation of a spot BTC ETF market in South Korea, following Hong Kong’s successful trading of spot BTC and Ether ETFs. The tightening regulations in the South Korean crypto market, including tougher sentences for crypto-related crimes and new guidelines for exchanges, indicate a growing focus on regulating the industry.

As the Democratic Party pushes for the approval of spot BTC ETFs, the future of virtual asset trading in South Korea remains uncertain but promising.