• South Korean Financial Supervisory Service (FSS) engages in talks with the SEC, signalling a potential shift in the country’s stance on spot Bitcoin ETFs.
• Speculation within South Korean investment circles grows as the government’s reconsideration may pave the way for the acceptance of crypto ETFs, impacting the investor landscape in the region.

In a surprising development, the South Korean Financial Supervisory Service (FSS) has expressed its interest in engaging with the United States Securities and Exchange Commission (SEC) to explore the possibilities surrounding spot Bitcoin exchange-traded funds (ETFs). This marks a potential shift in the South Korean government’s stance, which had previously maintained a strict ban on crypto ETFs despite the recent approval granted by the SEC in the United States.

High-Level Dialogue on Crypto Industry

The FSS Chief, Lee Bok-hyun, is set to make a pivotal visit to the U.S. later this year for a high-level discussion with SEC Chair Gary Gensler. The agenda includes delving into various aspects of the crypto industry, with a particular focus on spot Bitcoin ETFs. The announcement was made during Bok-hyun’s presentation of the business plans for 2024 at the Financial Supervisory Service in Yeouido, Seoul.

Key Discussion Points

During the anticipated meeting, Director Bok-Hyun and Chairman Gensler are expected to delve into critical areas such as Korea’s discount measures, the prospect of spot Bitcoin ETFs, and corporate value-up programs. The significance of the SEC’s policy on the global stage will also be a crucial topic of discussion.

Shifting Dynamics: Possible Reversal in South Korea’s Stance

This development comes less than a month after the SEC’s groundbreaking approval of the first batch of spot Bitcoin ETFs in the United States. The decision marked a significant departure from the agency’s decade-long history of rejecting similar proposals from various asset management firms.

Initially, the South Korean government had emphatically reiterated its commitment to maintaining the ban on crypto ETFs, emphasizing that cryptocurrencies would not be recognized as financial assets. However, the recent appointment of Sung Tae-yoon as the Presidential Chief of Staff introduced a new perspective.

Tae-yoon urged the South Korean Financial Services Commission (FSC) to align its stance with international standards, advocating for the acceptance of investment vehicles like ETFs. He emphasized the importance of flexibility rather than a rigid yes or no stance.

Market Speculation and Investor Sentiment

With the possibility of a policy U-turn on the horizon, speculation within South Korean investment circles is rife. Investment giants in the country are anticipating that, if spot Bitcoin ETFs are eventually launched, there would be a solid demand for these financial products.