Key Points
- South Korea’s Democratic Party plans to request a review of the ban on spot Bitcoin ETFs.
- The party aims to make spot Bitcoin funds accessible to local retail investors.
South Korea’s Democratic Party, a left-leaning political group, is reportedly planning to ask financial regulators to reassess the current prohibition on spot Bitcoin exchange-traded funds (ETFs).
This move is seen as the party’s latest effort to make spot Bitcoin funds available for local investors.
Political Influence on Crypto Regulation
In the recent general election held in April, the Democratic Party achieved a significant victory, securing 175 out of the 300 seats in the local legislative body. The ruling conservative party, on the other hand, won 108 seats. The Democratic Party had previously committed to facilitating the launch of spot crypto ETFs by local financial institutions and enabling retail investors to buy these funds through tax-exempt accounts.
Once the 22nd National Assembly of South Korea begins its session in June, the Democratic Party intends to ask the Financial Services Commission (FSC), the nation’s leading financial regulator, to reconsider the availability of spot Bitcoin ETFs in the local market. This information was revealed in a report by BloomingBit, which quoted a party member.
Regulatory Hurdles
At present, the FSC does not permit the issuance or trading of spot Bitcoin ETFs. This restriction is based on the regulator’s conclusion that there is no legal foundation for Bitcoin or any other cryptocurrency to be used as an underlying asset for such products.
In case the FSC remains hesitant to approve Bitcoin funds, the Democratic Party is reportedly considering the option to modify existing financial regulations. The party representative did not immediately respond to requests for comments on the matter.
