The U.S. Bitcoin spot ETF opened for trading last night, with a trading volume of more than 4.6 billion US dollars and more than 700,000 transactions on the first day, twice that of QQQ. The crypto community excitedly calls itself "US stock traders."
However, South Korea’s financial regulatory agency, the Financial Services Commission (FSC), issued a statement today saying that domestic brokers’ behavior of acting as agents for overseas listed Bitcoin spot ETFs may violate government regulations. Position on virtual assets and provisions of the Capital Markets Act. The move shows South Korea's concerns about cryptocurrency investment and tightens regulatory measures in the field. As one of the countries with high enthusiasm for investing in cryptocurrency, South Korea’s government and financial institutions attach great importance to protecting the interests of investors and maintaining the stability of the financial market.
Obviously these measures are to deal with the impact of the SEC’s approval of a Bitcoin spot ETF. This announcement caused major Korean securities firms, including Mirae Asset Securities and Samsung Securities, to ban customers from purchasing overseas Bitcoin spot ETFs.
For example, Mirae Asset Securities suspended trading in the world’s first Bitcoin spot ETF “Purpose Bitcoin ETF” (BTCC). The ETF was listed on the Canadian Securities Exchange in February 2021, and trading through domestic brokers was previously available prior to the FSC's announcement. However, trading has now been suspended due to increased regulatory pressure.
According to information disclosed to The Block by a spokesperson from South Korea’s Mirae Asset Securities, the latest financial regulator’s (FSC) statement has brokerages worried because it may cause existing foreign Bitcoin ETF transactions to be deemed is illegal. Therefore, they decided to suspend related transactions.
Note: However, foreign Bitcoin futures ETFs are still trading on multiple platforms because they have not been warned by the FSC.
Due to the impact of relevant news, South Korean cryptocurrency concept stocks generally fell sharply at the close today. The share prices of Woori Technology Investment and Hanwha Investment Securities, two companies that hold shares in Dunamu, the operator of Upbit, South Korea's three major exchanges, fell 9.1% and 14.89% respectively today.
The share prices of TScientific and its parent company Wizit, which hold shares in Bithumb, also fell 11.7% and 16.76% respectively.
On the other hand, Bitcoin futures ETFs have not been affected by the FSC statement, so Korean securities companies continue to open trading in these products.
At the same time, the FSC also mentioned in its statement that regulations on virtual assets are still being formulated, including the "Virtual Asset User Protection Law" that will take effect in July this year. Considering that there are already cases of related products in overseas markets, such as the United States, South Korea plans to further review these products and does not rule out the possibility of opening trading of overseas listed Bitcoin spot ETFs in the future.
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