Several major securities firms in South Korea suspended today the brokerage services of spot bitcoin ETFs, including those from Canada and Germany, as a preemptive measure following a cautionary announcement from the country’s financial watchdog.
“The brokering of foreign-listed bitcoin spot ETFs by domestic securities firms may violate existing government positions on virtual assets and capital market laws,” the Financial Services Commission said today in the notice, likely published in reaction to the U.S. approval of spot bitcoin ETFs.
The list of companies that made the suspension includes Samsung Group’s securities division and Mirae Asset Securities, according to local news outlet Dailian. Samsung Securities managed about $220 billion worth of assets at the end of 2022, while Mirae had about $215 billion in assets under management at the end of June 2023.
Mirae Asset Securities confirmed today with The Block that the company, along with several others, has halted new transactions of foreign spot bitcoin ETFs offered on its platform. The Mirae spokesperson cited the FSC’s announcement as the main reason for the suspension, adding that the local brokerages were concerned that existing offerings of foreign-based bitcoin ETFs could be interpreted as illegal.
Foreign bitcoin futures ETFs, which were not mentioned in the FSC’s warning, appear to continue trading across platforms. “Halting [bitcoin futures] ETFs has not been discussed,” the Mirae spokesperson said.
The FSC and Samsung Securities did not immediately respond to The Block’s request for comment.
Seeking regulatory clarity
Meanwhile, the FSC left room for further discussion in the announcement. The regulator noted that it plans to further examine the subject as the country continues to develop regulations surrounding cryptocurrencies.
The warning comes a day after one FSC official told local media on Thursday that the U.S. approval of spot bitcoin ETFs would not prompt the regulator to reconsider the ban on local financial institutions from launching their own crypto ETFs.
South Korea is developing a two-part crypto regulation, with the first part passed last year and set to go into effect in July this year. It is constructing the second part of its crypto act, which aims to set clear rules regarding the issuance, listing and delisting of cryptocurrencies.
