Major political factions in South Korea are pledging incentives related to cryptocurrency to garner support from voters in anticipation of the upcoming parliamentary elections. Per a Bloomberg article dated April 5, the Democratic Party opposition has pledged to eliminate limitations on domestic and international exchange-traded funds (ETFs) that directly hold cryptocurrency tokens, including those from United States Bitcoin ETFs. After the authorization of Bitcoin ETFs in January, South Korea’s securities regulator cautioned that the local distribution of these ETFs might breach domestic regulations.
However, Democratic Party representative Hwanseok Choi affirmed to Bloomberg that their manifesto includes provisions permitting domestic and overseas ETFs. Additionally, aiming to appeal to cryptocurrency enthusiasts, under President Yoon Suk Yeol’s leadership, the People Power Party promised to postpone taxes on profits from digital assets, originally set to commence in 2025.
In the initial six months of 2023, approximately six million South Koreans engaged in crypto trading through authorized exchanges, constituting 10% of the nation’s populace. Official disclosures reveal that 7% of election candidates possess cryptocurrencies.
MicroStrategy: Bitcoin ETF Influence Under Scrutiny
Information from the Korea Securities Depository indicates that cryptocurrency users have injected over $200 million into US-listed company MicroStrategy (MRST) stocks. With the company’s significant involvement in Bitcoin, some analysts have characterized it as effectively operating as a leveraged Bitcoin Exchange-Traded Fund (ETF).
Despite assurances from politicians, South Koreans are preparing for stricter regulations on cryptocurrency assets. In the coming weeks, local financial authorities will unveil fresh guidelines for listing tokens on centralized exchanges.
The guidelines may also require exchanges to delist cryptocurrencies in cases where issuers fail to sufficiently disclose crucial information, such as discrepancies between the stated circulation and the actual amount.
Related Reading | Crypto.com expands in South Korea despite increasing regulatory scrutiny
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