New South Korean Regulator Could Accelerate Bitcoin ETF Approval

A new regulatory body in South Korea is set to launch this month, with Bitcoin ETF approvals reportedly high on its agenda. The tentative name for the body is the Virtual Assets Committee, which could hold its inaugural meeting as early as this month.

Focus on Bitcoin and Ethereum ETFs

Operating under the Financial Services Commission (FSC), the new committee aims to expedite discussions around the approval of Bitcoin and Ethereum spot ETFs. Industry insiders have indicated that the committee will also consider allowing corporate investments in virtual assets, which has generated considerable interest among South Korean companies looking to follow the lead of their American and Japanese counterparts.

A financial sector expert mentioned earlier this year that several major domestic firms are eager to know if they will be permitted to purchase Bitcoin with their balance sheets, with some also eyeing Ethereum investments.

Delays in ETF Approval

Despite ongoing pressure from the industry and lawmakers, the FSC has consistently postponed discussions regarding Bitcoin ETF approval. According to anonymous sources in the crypto industry, the committee will also address "second-stage" crypto legislation during its meetings.

Upcoming Kickoff Meeting

Insiders have reported that the FSC plans to finalize the committee’s membership by the end of October and hold a kickoff meeting shortly thereafter. The legal framework for the committee was established under the Virtual Asset User Protection Act, which took effect in July. The FSC has appointed Kim So-young, its Vice Chair, as the head of the new commission, which will consist of 15 members—five of whom will be drawn from various ministries, including:

• Ministry of Economy and Finance
• Ministry of Justice
• Ministry of Science

The remaining nine members will be selected from the private sector.

Balancing Regulation and Growth

The FSC has emphasized that no decision on Bitcoin ETFs will be made until the committee is officially launched. The regulator's latest audit report also mentioned that the body will explore the issue of corporate virtual asset accounts.

Political and industry leaders have repeatedly called for action, especially as U.S.-based firms continue to launch Bitcoin ETFs and invest in Bitcoin. At a recent National Assembly meeting, FSC Chairman Kim Byung-hwan highlighted the importance of the new committee. However, lawmaker Lee Kang-il from the main opposition Democratic Party expressed concerns that South Korea's competitive edge in the crypto market has diminished.

Kim responded by stating that regulators aim to balance investor protection with the need to foster growth in the crypto sector. He emphasized that the Virtual Asset Committee will include private sector experts who will comprehensively examine the issues at hand.

Concerns Over Market Monopoly

Lee also criticized the FSC for allowing the exchange Upbit to dominate the market, suggesting that this could lead to the downfall of its competitors. In response, Kim acknowledged these concerns and assured that the FSC would investigate the matter further.

As South Korea prepares to launch its new regulatory body, the crypto community is hopeful that it will lead to significant advancements in the approval of Bitcoin ETFs and the overall growth of the digital asset market.