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South Korean regulators might not be fans of Bitcoin ETFs but the country's government just might be.
According to local reports, South Korea's Office of the President has urged the financial regulator to reconsider approving Bitcoin ETFs.
Sung Tae-yoon, the chief of staff for policy of the presidential office, said the South Korean government is looking to introduce foreign affairs into local regulations. The announcement is thought to be linked to crypto ETFs.
Last week, an official from South Korea’s Financial Services Commission (FSC) told local media that the SEC's approval has not prompted the country's regulator to reconsider its stance.
“The SEC also reluctantly allowed virtual asset ETFs on a limited basis in response to the court decision,” the official said.
The FSC expressed concerns including unauthorized fund outflows, money laundering, and potential speculative losses. These concerns were pivotal in their decision to maintain the ban, first imposed in December 2017, which prohibits financial institutions from investing in cryptocurrencies.
The presidential office's push for Bitcoin ETFs also coincides with an ongoing discussion in the country about crypto tax.
Jeong Jung-hoon, deputy minister of the tax and customs office for South Korea’s Ministry of Economy and Finance, said that the National Assembly is weighing up abolishing crypto asset gains from income tax for financial investments.
President Yoon Suk-yeol's administration intends to eliminate taxes on financial investments like stocks and funds to bolster the wealth-building and financial planning efforts of its citizens.
The new tax regime will start on 1 January 2025. Citizens with more than 2.5 million Korean won ($1,865) in crypto asset gains will be subject to a 22% tax. The government plans to submit an amendment later this month.