New South Korean Regulatory Body Expected to Accelerate Bitcoin ETF Approval Process

New South Korean Regulatory Body Expected to Accelerate Bitcoin ETF Approval Process

A new regulatory body focused on virtual assets is set to launch in South Korea this month, with the approval of Bitcoin Exchange-Traded Funds (ETFs) anticipated to be a key topic of discussion. Known tentatively as the Virtual Assets Committee, this new body will operate under the Financial Services Commission (FSC), South Korea's leading financial regulator.

According to reports from News1, the committee's formation is expected to facilitate more rapid discussions regarding the approval of both Bitcoin and Ethereum spot ETFs. Industry insiders have indicated that the committee is also likely to address the potential for corporate investment in virtual assets, reflecting the growing interest among South Korean companies in cryptocurrencies.

As the cryptocurrency market evolves, many South Korean firms are eager to enter the Bitcoin and Ethereum investment sectors, following in the footsteps of companies in the United States and Japan. A South Korean financial expert noted that multiple major domestic companies are seeking clarity on whether they can use their balance sheets to acquire Bitcoin. Additionally, some firms may express interest in investing in Ethereum if regulatory approval is granted.

Despite ongoing pressure from the industry and lawmakers, the FSC has repeatedly postponed discussions surrounding Bitcoin ETF approvals. However, the establishment of the Virtual Assets Committee is seen as a pivotal moment that may lead to progress in this area. Insiders have suggested that the committee will also address the second stage of cryptocurrency legislation, which could further shape the regulatory landscape for digital assets.

The kickoff meeting for the new committee is anticipated to occur before the end of October, with plans to finalize its membership soon. The committee will consist of a total of 15 members, including five regulatory or governmental officials drawn from key ministries such as the Ministry of Economy and Finance, the Ministry of Justice, and the Ministry of Science. The FSC has already appointed Vice Chair Kim So-young to lead the new commission, and the remaining nine members will be sourced from the private sector.

As the launch of the Virtual Assets Committee approaches, the FSC has reiterated that no decisions regarding Bitcoin ETF approvals will be made until the committee is fully operational. The most recent audit report from the FSC highlighted the importance of addressing corporate virtual asset accounts as part of the committee's mandate.

Political and industry leaders in South Korea have been vocal about the need for regulatory adjustments in light of US-based firms launching Bitcoin ETFs and acquiring Bitcoin. At a recent National Assembly meeting, FSC Chairman Kim Byung-hwan discussed the committee's role and the importance of balancing investor protection with the need for growth in the cryptocurrency sector.

However, criticism has emerged regarding the FSC's regulatory approach. Lawmaker Lee Kang-il of the main opposition Democratic Party pointed out that South Korea's domestic cryptocurrency market has lost its competitive edge compared to international markets. In response, Chairman Kim acknowledged the challenges and emphasized the regulators' commitment to protecting investors while promoting the growth of the crypto industry.

As the regulatory landscape evolves, the formation of the Virtual Assets Committee represents a significant step toward addressing the complexities of cryptocurrency regulation in South Korea.