South Korea's Financial Supervisory Service (FSS) has issued verbal directives to local asset managers regarding reducing investments in crypto stocks. This decision comes amid ongoing regulatory changes in the financial sector.
Directive from South Korea's Financial Supervisory Service
The FSS has informally instructed asset managers to reduce exposure to crypto stocks such as Coinbase and Strategy (formerly MicroStrategy). This warning emphasizes the need to adhere to the 2017 directive that prohibits institutional investments in virtual assets.
Reasons for the Directive
The FSS noted that despite ongoing discussions concerning reforms, regulated financial institutions must continue to follow existing guidelines until new laws are enacted. The 2017 administrative notice forbids these institutions from holding, purchasing, or investing in virtual assets or companies primarily involved in the sector.
State of the Crypto ETF Market in South Korea
South Korea has historically taken a cautious approach towards crypto ETFs. While retail investors are allowed access to foreign crypto-linked ETFs, local firms have been restricted from offering similar products. However, the country has begun recalibrating its stance, putting forth new measures to stimulate the local cryptocurrency market.
In light of these changes and the forthcoming regulatory reforms, South Korea continues to monitor the collaboration between asset managers and the crypto industry.
