New South Korean leadership will press for BTC ETF trading

May 7, 2024 Coin Telegraph

The Democratic Party of Korea promised to allow Bitcoin exchange-traded funds and it expects to follow through, one way or another.

The Democratic Party of Korea will request that the Financial Services Commission (FSC) reconsider its interpretation of the legal status of spot Bitcoin (BTC) exchange-traded funds (ETFs), according to a local press report. Allowing spot ETFs with underlying virtual assets was one of the party’s campaign promises.

An unnamed official of the Democratic Party policy committee told The Korea Economic Daily that the party would make the request after the opening of the National Assembly in June. The opposition party was swept into power in the April elections in South Korea and holds 175 of 300 seats in the legislative body.

The FSC issued a statement on Jan. 12 saying domestic securities firms could violate the Capital Markets Act by listing foreign spot BTC ETFs. The United States Securities and Exchange Commission approved spot BTC ETF trading on Jan. 10. The South Korean financial regulator’s position was not well received. The previous presidential administration urged the FSC to reconsider its decision on Jan. 18.

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Upbit owner Dunamu could see ‘monopoly’ curbed after investment controversy

April 22, 2022 Coin Telegraph

Capital Markets Act

The Upbit operator is under heavy scrutiny from local regulators as its total assets balloon and a subsidiary issued controversial investment advice.

The operator of South Korean crypto exchange Upbit, Dunamu, is facing pushback from regulators due to a controversial investment while authorities move to issue restrictions to stifle its monopolistic position.

Dunamu’s total assets are valued at over over 10 trillion KRW ($8.06 billion) and Upbit controls an overwhelming 80% of the domestic trading volume. As a result, regulators see Dunamu and by extension Upbit, as a monopoly with too much power that should be curtailed.

Regulators could prevent its growth by designating it a large corporation which would restrict its market activities.

Large corporations and investment firms in South Korea are subject to strict rules on what information they can share regarding investments under the Capital Markets Act. Corporations and their subsidiaries are prohibited from promoting investments, especially those they own or are related to.

Dunamu has been criticized for taking advantage of an apparent loophole in the country’s Capital Markets Act by holding a 40% stake in market tracking firm Triger which started offering crypto-related investment recommendations in March. Dunamu has since dumped its shares in the company.

A representative from Upbit told local news outlet Culture Journal on April 19 that it had dropped all of its subsidiary holdings of Triger, but has still asked the site to take down its crypto-related content. The rep stated:

“We have requested the termination of the service to prevent unnecessary misunderstanding."

Dunamu straddles the line between a large corporation and a financial investment firm under Korean law. Therefore, the firm is technically allowed to promote investments under the Capital Markets Act. However, Culture Journal reported that an industry insider pointed to such promotional content as a regulatory loophole which “should be revised to improve the situation.”

The firm’s standing as a small or medium-sized enterprise (SME) is reportedly likely to change in the near future. Local news source NoCut News reported on April 20 that the Fair Trade Commission (FTC) was seriously considering designating Dunamu as a large corporation partially as a result of its recent activities and for its sheer size.

Capital Markets Act