South Korea Tells Asset Managers to Curb Crypto Exposure in ETFs

TheCryptoTimesPublicado em 2025-07-23Última atualização em 2025-07-23

The Financial Supervisory Service (FSS) in South Korea released verbal guidelines directing domestic asset management companies to limit their exchange-traded fund (ETF) exposure to cryptocurrency-related businesses.

According to The Korea Herald, the directive was issued as the nation negotiates a changing regulatory environment of digital assets. The FSS is in charge of managing the daily activities of South Korean financial institutions and acts as the executive branch of the Financial Services Commission (FSC). It communicated the verbal instructions earlier this month.

The agency referenced the FSC 2017 administrative guidelines. These prohibit regulated financial institutions from acquiring or holding virtual assets or investing in companies tied directly to the crypto sector, such as Coinbase and MicroStrategy.

Domestic financial firms have reacted negatively to the decision, claiming that the limits lead to an imbalance in regulation. Retail investors can still access U.S.-listed ETFs with comparable crypto exposure, but institutional investors are subject to restrictions.

An unnamed FSS official told The Korea Herald that the 2017 guidelines remain in effect until new regulatory frameworks are fully established, despite ongoing changes in both South Korean and U.S. regulatory environments.

Under newly elected President Lee Jae Myung, who has publicly backed crypto innovation, the change accelerated. Promoting regional stablecoins based on the Korean won and introducing spot crypto ETFs domestically have been top priorities for his government.

This shift in policy expands on more extensive adjustments made following the U.S.’s more pro-crypto stance under President Donald Trump. Earlier in 2025, South Korea began unwinding its informal ban on institutional crypto trading.

With over 18 million active crypto investors by the end of 2024, South Korea remains one of the world’s most vibrant digital asset markets. And it is particularly known for its strong retail appetite for altcoins.

Also read: South Korean Bitmax Adds $5.2M Bitcoin to Treasury

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