Korean Virtual Asset Committee will focus on spot ETFs, corporate investments, and regulatory frameworks to support the growing crypto market.
The South Korean government is moving forward with establishing the Virtual Asset Committee, set to begin its work this month. The committee will focus on critical issues like approving virtual asset spot ETFs and corporate investments in virtual assets.
The committee will consist of fifteen people, of whom six will be government representatives and nine from the private sector. It will be headed by Kim So-young, Korea’s Financial Services Commission (FSC) vice chairperson. Its function will be to be involved in formulating virtual asset policies and coordinating the development of subsequent regulatory frameworks. The committee’s formation has come against the backdrop of the “Virtual Asset User Protection Act” passed in July which was the first step to regulating virtual asset operators in Korea.
Korean Authorities Eye Spot ETFs and Corporate Investments in Virtual Assets
Some of the major issues that are expected to be addressed include the possibility of issuing virtual asset spot ETFs. Today, though Bitcoin and Ethereum spot ETFs exist in the U.S., they are prohibited in South Korea. Some have even argued that South Korea should begin to offer spot ETFs to meet the growing demands within the current industry. The committee has considered this issue since the previous national election.
Another issue is the limitation of corporate virtual assets’ investments. There are some restrictions, such as Korean companies being unable to open virtual asset accounts or trade directly. However, domestic companies can only indirectly engage in virtual asset trading through OTC markets. The committee is expected to consider these restrictions given measures that would enable the corporations to conduct business in the virtual asset market.
Moreover, the committee will consider future actions in the legislation called the Virtual Asset User Protection Act’s “stage 2.” This will entail more rigorous regulation on virtual asset issuance, listing, and business undertaking. The FSC has commented that it will consider these matters in phases depending on market conditions and trends worldwide. The purpose is to develop a fair environment that would foster industry development while protecting investors.
Financial Services Commission Chairman Kim Byung-hwan has emphasised the need for a balanced approach to regulating the virtual asset market. He mentioned that while Korea once had an advantage in this sector, it is now at risk of falling behind. Establishing the Virtual Asset Committee is key to improving the regulatory environment.
