South Korea To Seek Insight From Gary Gensler on Spot Bitcoin ETF

Lee Bok-hyun, the Head of South Korea's Financial Supervisory Service (FSS), is scheduled to engage in discussions with U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler during his upcoming visit to the United States later this year.

According to local media, the meeting's agenda is set to encompass various facets of the crypto industry, with a primary emphasis on the Bitcoin spot Exchange-Traded Fund (ETF).

In the second quarter of 2024, Director Lee will visit major advanced financial markets, including New York, USA, following his strategic plans revealed at the Financial Supervisory Service in Seoul's Yeouido district.

Media reports have highlighted the importance of these discussions, positioning the Financial Supervisory Service as South Korea's integrated financial regulator.

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South Korea's Regulatory Dilemma

South Korea, however, remains cautious regarding spot Bitcoin ETFs. The Financial Services Commission (FSC) has issued a warning, suggesting that facilitating U.S. spot Bitcoin ETFs may breach local regulations, specifically concerning virtual assets and the Capital Markets Act. This cautionary stance from the FSC follows the SEC's groundbreaking approval of 11 spot BTC ETFs on January 10.

Historically, the SEC had denied spot BTC ETF applications, expressing concerns about the crypto market's relatively small size and susceptibility to market manipulation. Despite the US SEC's approval, South Korea's securities regulator cautioned local entities against brokering spot Bitcoin ETFs.

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Presidential Intervention

South Korea's Office of the President has intervened, urging the financial regulator to reconsider its stance and adopt a more flexible approach towards spot Bitcoin ETFs. 

However, Lee Bok-hyun emphasized the global ramifications of the SEC's policy on spot Bitcoin ETF approval, stating, "This is important." 

As per reports, the upcoming visit aims to foster a collaborative understanding between South Korea and the United States in navigating the complexities of the cryptocurrency market.

Following the historic approval of the first Bitcoin spot price exchange-traded funds in the United States, Asian industry leaders, particularly in Hong Kong, are actively exploring similar crypto products. Meanwhile, China's Harvest Fund Management becomes the first firm to apply for Hong Kong's inaugural Bitcoin exchange-traded fund (ETF).