South Korea Pushes Forward Bitcoin ETF Plans, Defying Regulatory Hurdles

Seoul isn't waiting for permission. Major financial institutions are charging ahead with Bitcoin ETF blueprints, sidestepping a regulatory wall that's been standing for years.

The Regulatory Gauntlet

Korea's Financial Services Commission (FSA) maintains its strict ban on local crypto ETFs. The rulebook hasn't changed. Yet, behind the scenes, asset managers and brokerages are building the plumbing—custody solutions, compliance frameworks, the whole architecture. They're not asking 'if' anymore; they're solving 'how.'

A Market Primed for Launch

Investor appetite is the real catalyst. Domestic trading volumes on major exchanges consistently rival traditional stock markets. This isn't niche speculation; it's mainstream demand looking for a regulated on-ramp. The first firm to crack the code taps into a multi-billion-dollar reservoir of sidelined capital.

The Global Pressure Cooker

Watch Hong Kong and the U.S. Their approved ETFs set a precedent that Korean regulators can't ignore forever. Every inflow report from those markets turns up the heat. It creates a glaring competitive disadvantage—Korean capital flowing overseas for a product it can't buy at home.

Closing the Gap

The endgame is inevitable. The current maneuvering isn't about rebellion; it's about preparation. When the policy dam finally breaks—and it will—these pre-built plans launch overnight. It's the old finance playbook: move slowly until you can't, then move at lightning speed and call it innovation.

TLDR

• The Korea Exchange has confirmed it is fully prepared to offer Bitcoin ETFs and related crypto products.
• Current South Korean laws still prevent cryptocurrencies from being used as underlying assets for ETFs.
• The Financial Services Commission is reviewing possible legal changes through a dedicated crypto committee.
• Industry leaders and political figures have expressed strong support for introducing Bitcoin and Ether ETFs.
• President Lee Jae-myung has promised to legalize spot Bitcoin ETFs following his recent election win.

The Korea Exchange (KRX) has confirmed its readiness to offer cryptocurrency-based products, including Bitcoin ETFs and derivatives, although current laws prevent immediate launches, and despite mounting political and industry support, regulations remain a key hurdle while the crypto market continues to grow in demand.

KRX Signals Operational Readiness

KRX announced its preparedness to launch Bitcoin ETFs once regulatory approval is granted. Chairman Jeong Eun-bo stated the exchange can respond quickly if rules change.

He shared the update during the opening ceremony for the year’s first trading session. “KRX has completed preparations for diversified products such as cryptocurrency ETFs,” he said.

This forms part of broader efforts to modernize South Korea’s capital markets. Authorities are also reviewing 24-hour trading and enhancing digital infrastructure.

Although no specific dates were provided, Jeong’s comments suggest internal alignment with market trends. He stressed KRX’s ability to act swiftly once policy direction is finalized.

Regulatory Barriers That Keep Coming Up

Current law blocks digital assets from being classified as underlying securities. This prevents bitcoin ETFs from being introduced under the Capital Markets Act.

The Financial Services Commission (FSC) is reviewing this through a special crypto committee. They are examining whether digital assets can be recognized within the legal structure.

This review shows the gap between market readiness and legal acceptance. Regulators continue weighing financial innovation against existing laws.

There is no confirmed timeline for legal updates or approvals. However, the ongoing internal review suggests momentum is building.

Building Support from Industry and Politics

Industry officials are pushing for access to Bitcoin and Ether ETFs. In February, KOFIA’s chairman voiced support for regulated crypto investment products.

He emphasized that local demand is rising for secure access to cryptocurrencies. The association plans to continue advocating for these investment options.

Political support has also emerged during the last election. President Lee Jae-myung pledged to legalize spot Bitcoin ETFs if elected.

He won the election in May, boosting pressure on regulators to act. Since then, expectations for faster reform have increased.

FSC continues internal discussions without a clear public timeline. However, KRX’s infrastructure readiness may reduce delays once approval comes.