According to local reports, the People Power Party, which is in power in South Korea, has put off for ever its plan to loosen regulations surrounding cryptocurrencies, including the prohibition on local exchange-traded funds (ETFs) that track Bitcoin prices.
The party’s reversal of commitments may be related to difficulties in coordinating its stance on cryptocurrency regulations with the government and financial regulators, according to a report by the local media, Chosun Biz.
There were rumors earlier this month that the ruling party was drafting election pledges to postpone taxing cryptocurrency gains and allow domestic institutions to launch spot Bitcoin ETFs and make direct investments.
Reportedly, the People Power Party, led by Representative Yoon Chang-hyun, decided to postpone its announcement of a virtual asset commitment until further notice, therefore they deleted virtual assets from their list of policy goals.
The country’s financial authority reiterated in January its ban on financial institutions launching exchange-traded funds (ETFs) based on the argument that virtual assets are not the same as the underlying assets listed in the Capital Markets Act. Spot cryptocurrency ETFs are currently off-limits to local investors, while overseas crypto futures instruments are still available.
The Financial Services Commission of South Korea is wary of virtual assets despite the United States Securities and Exchange Commission (SEC) having just approved the first Bitcoin ETF. The commission cites anticipated investment dangers related to virtual assets.
The opposition Democratic Party, meanwhile, formally unveiled their cryptocurrency campaign promises last week. It had apparently previously made similar promises about crypto ETFs. On April 10, there will likely be a general election in South Korea.
The People Power Party took into consideration a plan to allow corporate investments in virtual assets and postpone taxing them for a period of two years, according to the local source. However, due to insufficient consultation with pertinent ministries and worries about possible significant losses—particularly with reference to corporate involvement in virtual assets—this idea was never finalized as a pledge.
The main financial regulator in South Korea, the Financial Supervisory Service (FSS), is to consult the US Securities and Exchange Commission for advice on spot Bitcoin exchange-traded funds.
In Q2, FSS CEO Lee Bok-Hyun presented his 2024 business plan, which included trips to important financial hubs including New York. Discussions about South Korean financial markets, with an emphasis on spot Bitcoin ETFs, are on the agenda.
As the Bitcoin bull run picks up steam, spot ETFs set fresh all-time highs of $680 million.
The Fidelity Wise Origin Bitcoin Fund and the ARK 21Shares Bitcoin ETF helped the iShares Bitcoin Trust post the largest daily inflows on February 28 at $612.1 million.
Spot Bitcoin BTC tickers down $62,810 ETFs in the US saw a total daily influx of $676.8 million, setting a new standard for the ecosystem’s all-time high (ATH). Investments of close to $680 million were made in spot Bitcoin ETFs.
The U.S. Securities and Exchange Commission has approved ten players, of which five are responsible for the daily inflows: iShares Bitcoin Trust ($612.1 million), Bitwise Bitcoin ETF ($9.9 million), ARK 21Shares Bitcoin ETF ($23.8 million), and WisdomTree Bitcoin ETF ($2.2 million).
