On Thursday, the chairman of the South Korean Stock Exchange, Jeong Eun-bo, disclosed their intention to “investigate” the approval of crypto-oriented exchange-traded funds (ETFs) to persist with its “value enhancement initiative” and address the persistent market difficulties.
Korea Exchange To Investigate Crypto ETFs
On January 2, Jeong Eun-bo declared the Korea Exchange’s strategy to investigate crypto-oriented ETFs this year during the 2025 Securities and Derivatives Market opening ceremony. The Chairman indicated that the capital markets in South Korea confronted notable challenges in 2024, which hampered the growth potential of local businesses.
Jeong also mentioned that international conflicts and local political dynamics rendered the market “considerably sluggish compared to major nations.” The South Korean market will still encounter risks this coming year as “the domestic and international economic environment is unfavorable.”
Nevertheless, the Chairman clarified that the exchange would persist in advancing its value enhancement initiative to “attract more leading firms and foster a management culture centered on shareholder value.”
Additionally, Jeong revealed that the Korea Exchange will “use international examples to explore new business opportunities such as crypto ETFs and venture into uncharted territory in the capital market.”
It’s important to note that crypto ETFs have been prohibited in South Korea since 2017. The nation’s regulatory body, the Financial Services Commission (FSC), reaffirmed its position after the US Securities and Exchange Commission (SEC) authorized crypto-based investment products last year.
However, the financial authority announced in October that the newly established advisory group to discuss digital asset policies would reassess the ban, signaling a possible shift from stringent regulation. This transition appears to be inspired by the success of spot Bitcoin and Ethereum ETFs, which exceeded most analysts’ expectations in their inaugural year.
South Korea’s Political Crisis Impeding New Regulations
The head of the Korea Exchange had previously urged the institutionalization of crypto in the nation to “generate added value.” Jeong asserted that legislators and financial institutions should reassess digital assets, contending that the industry has evolved and gained substantial influence in recent years.
The Chairman noted that South Korea should contemplate integrating digital assets into institutional finance, as the market requires revitalization to remain competitive with other nations.
The current regulatory viewpoint on digital assets has hindered the market from surpassing various regulatory benchmarks for several years, obstructing its development and competitiveness. However, regulations pertaining to crypto will remain on hold until the political crisis is resolved, which may take a few months.
In December, South Korean President Yoon Suk Yeol announced the first emergency martial law in four decades. Yoon accused the opposition Democratic party, which holds a majority in the National Assembly, of sympathizing with North Korea and engaging in anti-state activities.
The National Assembly voted to revoke the President’s declaration and successfully concluded the emergency martial law within six hours. Since that time, the Assembly has impeached Yoon and Prime Minister Han Duck-soo, who took over as acting president following the suspension of Yoon’s powers.
According to Associated Press reports, South Korea’s presidential security service prevented authorities from detaining Yoon today during a six-hour standoff at the residence of the impeached President.
Consequently, the anti-corruption agency intends to “strongly urge” the current acting head, Deputy Prime Minister Choi Sang-mok, to order the service to adhere to the execution of the detention warrant.
The Constitutional Court is scheduled to decide whether to remove Yoon from office or reinstate him. For his removal, at least six justices on the nine-member court must vote in favor.
Total crypto market capitalization stands at $3.41 trillion in the one-week chart. Source: TOTAL on TradingView
Featured Image from Unsplash.com, Chart from TradingView.com