Bitcoin ETF Regulation: South Korean Financial Supervisory Service Chief Takes Open-minded Approach, Taiwan Financial Supervisory Commission Chair deems High Risk and Lack of Intrinsic Value

Bitcoin ETF Regulation: South Korean Financial Supervisory Service Chief Takes Open-minded Approach, Taiwan Financial Supervisory Commission Chair deems High Risk and Lack of Intrinsic Value

Bitcoin ETF Regulation: South Korean Financial Supervisory Service Chief Takes Open-minded Approach, Taiwan Financial Supervisory Commission Chair deems High Risk and Lack of Intrinsic Value

In response to a request from securities firms, the South Korean Financial Supervisory Service (FSS) stated in January of this year that it does not intend to regulate overseas Bitcoin futures ETFs differently from the current situation. This means that the institution allows overseas Bitcoin futures ETFs to be traded in South Korea.

The FSS pointed out that Bitcoin futures ETFs track the Bitcoin futures index listed on the Chicago Mercantile Exchange (CME), rather than the spot price of Bitcoin. Therefore, it does not violate the requirements of the Capital Market Act for underlying assets in principle. However, considering the question of whether Bitcoin qualifies as an underlying asset, the issuance and sale of Bitcoin spot ETFs may violate the Capital Market Act.

Recently, Lee Bok-hyun, the director of the FSS, was asked about Bitcoin spot ETFs in a TV interview. He stated that the Korean authorities are discussing whether to allow the sale of Bitcoin spot ETFs in the country. Although he personally holds an open attitude towards virtual assets, he still needs to listen to the opinions of others within the FSS and discuss this issue together. According to Reuters, Lee Bok-hyun stated in the interview:

In addition, Lee Bok-hyun stated that after the implementation of the “Regulations on the Protection of Virtual Asset Users” and the “Regulations on the Supervision of the Virtual Asset Industry” in the second half of this year, the public will have the opportunity to express their opinions.

Compared to South Korea, the Financial Supervisory Commission of Taiwan also holds a conservative attitude towards Bitcoin spot ETFs.

Since the US Securities and Exchange Commission approved the listing of Bitcoin spot ETFs in January of this year, Taiwanese investors were originally able to purchase related ETFs through “omnibus orders”. However, in February, the Financial Supervisory Commission prohibited securities firms from purchasing Bitcoin spot ETFs through omnibus orders, citing reasons such as high price volatility and risk of virtual currency commodities, as well as the lack of intrinsic value. If the Securities and Futures Institute intends to re-include omnibus orders in Bitcoin spot ETFs, it must submit a corresponding plan to the Financial Supervisory Commission by the end of April for consideration.

In addition, Kuomintang legislator Ke Ju-jun also criticized the Chairman of the Financial Supervisory Commission, Huang Tien-mu, during questioning in the Legislative Yuan yesterday, urging the commission not to decide what the public can invest in based on subjective ideas. He demanded that the Financial Supervisory Commission protect the basic rights of the public to invest in overseas legal and compliant virtual currency ETFs, with corresponding investigation reports as the basis.