The head of South Korea’s financial regulator, the Financial Supervisory Service (FSS), plans to meet with U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler to discuss spot Bitcoin ETFs.
According to local publication Hankyung, FSS governor Lee Bok-Hyun presented a business plan for the year ahead on February 5, detailing plans to visit “advanced financial markets” including New York. Lee also revealed plans to meet with SEC chair Gensler, with topics on the table to include the “important” subjects of virtual assets and spot Bitcoin ETFs.
South Korea’s regulators have taken a cautious approach to Bitcoin ETFs; in January, the Financial Services Commission reiterated that it would not adjust its stance on rules that block financial institutions from launching crypto ETFs, in response to the landmark approval of multiple spot Bitcoin ETFs in the United States. It also warned that brokering U.S. spot Bitcoin ETFs could be illegal in local markets, under the country’s Capital Markets Act.
The Capital Markets Act limits underlying assets for ETFs to financial investment instruments, currencies and ordinary commodities; crypto is excluded as it is not considered a financial asset.
The SEC’s approval of spot Bitcoin ETFs in the U.S. in early January was considered a watershed moment for institutional acceptance of cryptocurrency, but the U.S. regulator took the step only reluctantly. The SEC had been rejecting applications from firms hoping to offer such an investment product to U.S. investors for more than a decade, always citing concerns about market manipulation.
After years of delays and rejected applications, the SEC took the step after a court order to review Grayscale’s application, which agreed that the regulator’s judgment had been “arbitrary and capricious.”
In a statement accompanying the approval, Gensler conceded that “circumstances, however, have changed,” while also taking the opportunity to state that, “we did not approve or endorse Bitcoin.”
Edited by Stacy Elliott.