South Korean regulator to review crypto ETF approval: report

South Korea’s financial watchdog is taking steps to enhance its cryptocurrency regulatory framework by reviewing the approval of spot crypto ETFs and the legalization of corporate crypto accounts through a newly established Virtual Assets Committee. This committee, chaired by the vice chairman of the Financial Services Commission (FSC), includes representatives from various government ministries and private-sector experts.

Despite Bitcoin and Ethereum having received spot ETF approvals in the U.S. and Hong Kong, South Korea has yet to follow suit. Currently, corporate crypto accounts remain prohibited, but the FSC is facing increasing pressure to adapt its regulations as the domestic crypto market matures.

While the report does not specify a timeline for when these approvals might be considered, it highlights ongoing efforts by the FSC to renew applications from virtual asset service providers registered in 2021 and to amend the Specific Financial Information Act to enhance oversight of market manipulation and unfair trading practices.

The FSC is also contemplating further regulatory measures, termed “Phase 2 legislation,” aimed at tightening controls over crypto businesses, including issuance and listing requirements, following the introduction of the Virtual Asset User Protection Act in July.

As part of this regulatory push, major domestic exchanges like Upbit, which holds a significant share of the local market, are under scrutiny, reflecting the FSC’s commitment to balancing market growth with investor protections.