South Korea’s Financial Services Commission (FSC) has announced plans to introduce a regulatory framework for spot cryptocurrency ETFs (Exchange Traded Funds), aiming to bring digital assets further into the mainstream financial system while enhancing transparency and investor protection.
According to a recent policy report submitted to the Presidential Transition Committee, the FSC intends to finalize the groundwork for spot ETF approval in the second half of 2025. The goal is to establish a regulatory and operational infrastructure that supports ETFs based on real crypto assets, such as Bitcoin, rather than futures-based derivatives.
The FSC emphasized that several key prerequisites must be met before launching spot crypto ETFs in Korea. These include:
-
Transparent and reliable crypto asset pricing benchmarks
-
Trusted custodians to securely hold the underlying assets
-
Derivative instruments to allow authorized participants (APs) to hedge their risk
The regulator is also working on detailed guidelines for relevant institutions such as asset management companies, custodians, exchanges, and pricing agencies. At the same time, it is developing a comprehensive investor protection framework in parallel with the ETF initiative.
This includes measures such as:
-
Requiring public disclosure of fee structures across domestic crypto exchanges
-
Establishing stronger enforcement tools against insider trading and unfair market practices
-
Introducing a clear regulatory framework for KRW-backed stablecoins
-
Advancing the second phase of the Digital Asset Basic Act, which will set standards for token listings, disclosures, and exchange operations
Analysts view the move as aligning with international developments, particularly the successful launch of spot Bitcoin ETFs in the U.S. and Hong Kong. It is also seen as a strategic response to rising demand among younger Korean investors, who are increasingly turning to digital assets for long-term wealth building.
