Crypto ETF coming to South Korea

The largest bank in South Korea Kookmin Bank is set to become the first to provide a crypto investment vehicle for its customers.

The news was confirmed in an official statement by head of index quant management became official once Honggun Kim.

The compliance issues around launching an exchange-traded fund (ETF) for cryptocurrency is still not clear in South Korea.

To manage this Kookmin Bank’s asset management team has created a committee to analyze potential issues with compliance and to develop investment strategies.

Kookmin Bank’s asset management team is considered to be one of the most influential financial groups in South Korea with more than $500bn in assets.

Regulations in South Korea are still harsh on cryptocurrency holders. Currently it is not legal for South Korean banks to offer cryptocurrency solutions to their customers directly. Under the current laws they can offer indirect services towards cryptocurrencies, like through ETFs.

In late 2021, regulation changes in South Korea forced a lot of cryptocurrency exchanges to close. The few exchanges that remained open were forced to reevaluate their offerings and many of them delisted tokens from their platforms.

Prior to last year’s regulation changes, South Korea had been one of the few countries which did not regulate or tax digital assets. The number of users trading cryptocurrency skyrocketed and pushed them into the top five countries trading in digital assets

With the largest bank in the country moving towards an ETF, this could push the country to pass more friendly regulations.

Upbit is currently the largest cryptocurrency exchange in South Korea. Upbit has a daily average volume of around $2bn dollars and has the most user accounts of any other South Korean exchange.

This newest ETF offering could take over as the dominant cryptocurrency offering in the country as it will allow institutional investors to have a safer custodial option for digital currencies.


Updated: 02/25/2022 — 16:00