South Korea’s Financial Supervisory Service (FSS) has issued verbal warnings to local asset management firms, urging them to reconsider their positions on cryptocurrency exchange-traded funds and firms like Coinbase and Strategy, which are listed in the US. Despite the evolving regulatory climate in both the US and South Korea, the FSS emphasized the continuation of the policy established in 2017. This warning, communicated directly rather than through written notices, aims to inject caution into mid-to-long-term investment decisions, as reported by the Korea Herald.
2017 Policy’s Verbal Reinforcement
The FSS’s verbal warning highlights the sustained framework preventing regulated financial institutions from holding direct or indirect stakes in cryptocurrency assets. Although there is a growing interest in Bitcoin 
$75,023-focused funds in the US, the limits imposed in 2017 have not been relaxed. Officials reiterated that the rule set remains unchanged and is merely being reinforced.
According to Korea Herald, the FSS engaged in personal communication with the relevant institutions. This direct approach underscored the existing regulations without the need for a formal update, with a clear message for companies: Regulations are still in place, and investment strategies must align with these boundaries.
Impact on Investment Decisions
Local asset managers might increasingly favor risk-averse strategies for cryptocurrency investments, including in international markets. The warning could prompt a reassessment of the allocation of corporate portfolios to US-based companies like Coinbase. Experts note that such reminders can swiftly influence market preferences in times of uncertainty.
The FSS acknowledged the volatility and risks inherent in cryptocurrency markets, indicating no plans for sudden policy changes. Even as the regulatory environment in the US and South Korea evolves, the emphasis on “compliance with existing rules” reflects a pursuit of stability.
