The Democratic Party of Korea plans to ask the Financial Services Commission (FSC) to reconsider its interpretation of the legal status of spot Bitcoin (BTC) exchange-traded funds (ETFs), as reported by a local press outlet. The party had promised to allow spot ETFs with virtual assets as part of its campaign. An unnamed official from the Democratic Party policy committee revealed that the request would be made after the opening of the National Assembly in June. The opposition party gained power in the South Korean elections in April and currently holds 175 out of 300 seats in the legislative body.
The FSC had previously stated on January 12 that domestic securities firms could violate the Capital Markets Act by listing foreign spot BTC ETFs. This position was not well-received, and the previous presidential administration urged the FSC to reconsider on January 18. According to the prevailing interpretation, virtual assets are not considered underlying assets under the Capital Markets Act. However, amending this act would be a lengthy process, requiring multiple steps and months to complete. The official also mentioned that discussions would begin in the second half of the year on the second stage of the 2020 Virtual Asset Business Rights Act.
Despite the modest performance of spot BTC and Ether (ETH) exchange-traded funds in Hong Kong, their introduction on April 30 has raised hopes for a similar market in South Korea. The country has been tightening its grip on the crypto market since the passage of the 2020 act, with stricter sentences for crypto-related crimes and new guidelines for cryptocurrency exchanges being implemented. South Korea’s crypto universe has been described as unique and amazing.