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South Korean Presidential Office Suggests Reevaluation of Bitcoin ETF Approval

The Presidential Office of South Korea has put forth a proposal to revisit the approval of a domestic spot Bitcoin exchange-traded fund (ETF). Sung Tae-yoon, the Chief of Staff for Policy at the South Korean Presidential Office, is behind this recommendation.

During a briefing, Sung emphasized the government’s interest in harmonizing local regulations with international standards and indicated a willingness to adopt a more open stance toward cryptocurrencies and related financial products, including ETFs.

In response to a question during the briefing about whether the government is considering the institutionalization of Bitcoin, Sung stated, “We need to appropriately amend our country’s legal framework so that events occurring abroad can be accepted within our country.” This statement reflects the government’s intention to adapt its legal framework to accommodate developments in the cryptocurrency space and align with global trends.

South Korea’s Government Reviews Spot Bitcoin ETF Prospects

The statement from the Presidential Office comes in response to a prior announcement by the South Korean Financial Services Commission concerning U.S. spot Bitcoin ETFs. The Commission cautioned domestic securities firms against listing these ETFs.

The Commission stated, “Domestic securities firms brokering overseas-listed Bitcoin spot ETFs may violate the existing government stance on virtual assets and the Capital Markets Act.”

However, the Commission did leave room for possible adjustments, stating, “However, regulations on virtual assets are being established, such as the Act on the Protection of Users of Virtual Assets, etc., which went into effect in July of this year. We plan to further review them as there are overseas cases, such as in the United States.”

Sung reiterated that the government has not reached a final decision regarding Bitcoin ETFs, emphasizing that they have instructed the Financial Services Commission not to commit to a specific direction of “yes or no.”

The reconsideration process will primarily focus on assessing potential side-effects and risk factors that foreign financial products may introduce to South Korea, suggesting a cautious and thorough approach to the matter.

IBK Analysis: SEC’s Role in Bitcoin Price Fluctuations

The Industrial Bank of Korea (IBK) Investment and Securities has expressed optimism about the cryptocurrency market, specifically noting strong demand among individual investors for direct participation.

Despite the recent drop in the price of Bitcoin to around $41,000 (at the time of writing, according to CoinMarketCap), an IBK researcher suggested that the post-approval slump of Bitcoin ETFs can be attributed to the U.S. Securities and Exchange Commission (SEC).

The researcher stated, “The reason for the temporary weakness is confirmed to be due to the pre-projection of the issue and the influence of the SEC.” They went on to explain that Bitcoin had been displaying strength due to expectations surrounding the listing of Bitcoin spot ETFs and the decline in U.S. market interest rates since October of the previous year.

This perspective indicates that despite short-term fluctuations, there remains a positive outlook for the cryptocurrency market, driven by factors such as ETF developments and broader market dynamics.

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Cryptocurrency is essentially virtual money that operates in a decentralized manner, not through a bank but directly on multiple independent computers.

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