South Korean regulator to review crypto ETF approval: report

South Korea’s financial watchdog will reportedly review the approval of spot crypto ETFs and the legalization of institutional crypto accounts through a newly created committee.

South Korea, which has been cautious in its approach to crypto regulations, is now considering the approval of spot crypto exchange-traded funds and institutional crypto accounts through the newly formed Virtual Assets Committee.

According to News1 Korea’s report dated October 10, the committee, which will be chaired by the vice chairman of the Financial Services Commission, will include representatives from various ministries and private sector experts. While Bitcoin (BTC) and Ethereum (ETH) have received approval from regulators for spot ETFs in the US and Hong Kong, South Korea has yet to allow such products and institutional crypto accounts remain prohibited.

However, the report does not specify a specific timeline for when South Korean officials will review the approval of crypto ETFs.

South Korea steps up crypto regulation

The move comes as Korea’s regulator faces growing calls for reform in these areas as the domestic crypto market evolves. The report notes that the FSC is currently processing renewal applications for virtual asset service providers who first registered in 2021 as the regulator introduces changes to the Private Financial Information Act designed to improve oversight of market manipulation and unfair trading practices.

The FSC has also reportedly stated that it is considering “Phase 2 legislation” that would focus on tighter regulatory controls such as issuance and listing requirements for crypto businesses, following the recent enactment of the Virtual Asset User Protection Act introduced in July.

South Korea is gradually expanding crypto oversight, focusing on balancing market growth with investor protections. As a result, major domestic crypto trading platforms such as Upbit have come under increased scrutiny, with the FSC recently investigating the exchange’s dominance and ties to K Bank.

With nearly 80% of the local market, Upbit is the country’s largest crypto exchange and ranks fifth globally in terms of 24-hour trading volume.