South Korea’s Top Exchange Says It’s Ready for Bitcoin ETFs, But Regulators Still Stalling
Korea Exchange chairman Jeong Eun-bo announced plans to launch crypto ETFs and lengthen buying and selling hours to 24/7 operations in the course of the bourse’s first buying and selling session of 2026.
The pledge arrives as South Korea’s monetary regulator and central financial institution stay locked in a protracted dispute over stablecoin issuance rules which have pushed complete digital asset laws into subsequent 12 months.
According to the native report, Jeong advised attendees on the Korea Exchange’s Seoul headquarters that new funding merchandise, together with virtual asset ETFs and derivatives, could be launched as a part of efforts to beat the “Korea Discount” and improve the capital market.
He additionally dedicated to deploying AI-based monitoring techniques and strengthening crackdowns on inventory manipulation via a joint response group.
Korea Exchange Ready, Regulators Still Divided
The Korea Exchange’s readiness to launch crypto merchandise contrasts sharply with regulatory delays which have stretched again years.
The Financial Services Commission submitted a roadmap in June proposing spot crypto ETFs for late 2025, however the plan has but to materialize.
Meanwhile, South Korea’s complete Digital Asset Basic Act stays stalled in 2026 after the Financial Services Commission and Bank of Korea failed to reach an agreement on stablecoin governance.
The central financial institution insists that stablecoins ought to be issued solely by bank-led consortia, with lenders holding at the very least a 51% possession stake.
The FSC has resisted the mounted threshold, warning it may sideline know-how companies and gradual innovation in digital funds.
Regulators additionally disagree on whether or not a brand new licensing committee is required for stablecoin oversight.
Beyond stablecoins, the draft legislation would introduce strict investor protections, together with full-reserve custody necessities, and lift compliance requirements for crypto service suppliers to match these in conventional finance.
Initial coin choices banned since 2017 may return beneath strict disclosure guidelines.
Stablecoin issuers could be required to carry reserves solely in financial institution deposits or authorities bonds, with 100% of these reserves entrusted to licensed custodians.
South Korea’s complete crypto legislation has been delayed to 2026 as a result of a dispute over who ought to be allowed to difficulty stablecoins.#Crypto #Regulationhttps://t.co/jKP9L9n63S
— Cryptonews.com (@cryptonews) December 30, 2025
The regulatory deadlock continues regardless of sturdy political momentum from President Lee Jae-myung’s administration, which campaigned on easing digital asset restrictions.
The ruling Democratic Party introduced legislation in June to amend the Capital Markets Act, increasing the definition of underlying belongings for ETFs to incorporate Bitcoin and different digital currencies.
A separate invoice proposed legalizing stablecoin issuance by home companies with a minimal capital of 500 million gained.
However, Bank of Korea Governor Rhee Chang-yong has opposed the event of non-bank stablecoins as a result of financial coverage considerations.
Enforcement Drive Continues Across Major Exchanges
While coverage debates drag on, enforcement actions have accelerated.
The Financial Intelligence Unit imposed a ₩27.3 billion fine on Korbit in late December following roughly 22,000 anti-money laundering violations recognized throughout October inspections.
The regulator discovered failures in buyer identification, unauthorized transactions with unregistered abroad platforms, and insufficient money-laundering danger assessments for new merchandise.
The Korbit penalty adopted earlier sanctions towards Upbit operator Dunamu, which obtained a three-month suspension on new buyer accounts in February and a ₩35.2 billion tremendous in November.
Bithumb, Coinone, and GOPAX stay beneath assessment because the FIU works via circumstances in inspection order, with complete fines throughout the sector anticipated to achieve a whole lot of billions of gained.
South Korea is ready to hit main crypto exchanges with new penalties over anti-money laundering failures, signaling a harder enforcement part for the trade.#SouthKorea #CryptoAML https://t.co/9r42trYMmE
— Cryptonews.com (@cryptonews) November 24, 2025
Authorities are concurrently increasing transaction monitoring necessities.
The similar late final month, a process power led by the FIU is reviewing whether to extend the travel rule to cowl crypto transfers under 1 million gained, closing a niche regulators say has enabled smurfing strategies used to evade reporting thresholds.
The proposed modifications would require exchanges to gather sender and recipient data for all digital asset transfers, no matter dimension.
The regulatory uncertainty has created contradictory steering for asset managers.
In July, the Financial Supervisory Service issued verbal warnings restricting the proportion of crypto-related stocks, reminiscent of Coinbase and MicroStrategy, in home ETF portfolios, citing administrative steering from 2017 that continues to be in impact.
Several Korean ETFs already maintain double-digit allocations to those corporations via passive index monitoring.
However, trade contributors argued that the restrictions create unfair benefits for US-listed crypto merchandise whereas failing to forestall capital outflows.
“Restricting solely home ETFs won’t cease the move of funds, and in actuality, many traders are already bypassing the market with U.S. ETFs,” one supply famous on the time.
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