(Bloomberg) — South Korea sought to stifle a potential flood of speculative money heading into U.S. bitcoin exchange-traded funds, sparking confusion and upending a slew of stocks.
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The Financial Services Commission, the country’s securities regulator, said on Thursday that brokering such ETFs could violate the government’s current stance on virtual assets and the Capital Markets Act. Wizit fell as much as 13% and other cryptocurrency-related stocks fell in early trading on Friday.
This is one of the first cautious responses from a major regulator after the US Securities and Exchange Commission gave the green light to about a dozen exchange-traded funds to hold bitcoin directly earlier this week. South Koreans are known for embracing crypto assets, and a draft digital assets law was approved last year to strengthen investor protections. Consumer guarantees have been in focus since the collapse of tokens created by Do Kwon worth more than $40 billion.
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The Financial Services Commission said it plans to further review digital asset rules as external regulations change.
A batch of spot bitcoin ETFs has launched in the US – including offerings from investment powerhouses BlackRock Inc. and Fidelity Investments – off to a strong start, with about $4.6 billion worth of stocks changing hands in a frenetic debut on Wall Street on Thursday. Industry proponents see ETFs as the ultimate stepping stone to broader mainstream adoption by everyday investors and the catalyst for further gains.
–With assistance from Yukyung Lee.
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