South Korea is bound by FSS, including encryption stocks in traded investment funds star-news.press/wp

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Sujha Sundarajan

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Sujha Sundarajan

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July 23, 2025

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The Financial Supervision Service (FSS), the integrated financial organizer in South Korea, recommended that asset management companies “do not include” coding shares such as Coinbase and the strategy in its surveys portfolios.

The organizer issued oral instructions for local companies, which restricts the percentage of encryption companies in the circulating investment funds, Harald mentioned.

The guidance indicates that the 2017 administrative guidance related to virtual currencies is still valid and must be followed.

In addition, FSS administrative guidance includes provisions that are restricted by financial institutions from “contracting, buying and acquiring guarantees and investing in virtual assets.”

“Recently, there has been a trend for the standard cancellation of virtual assets in the United States and Korea, but there have been no specific laws or guidelines that have been established yet.” “This means that the current instructions should be followed until the new system is completed.”

The current digital assets of South Korea

Since 2017, Korean organizers have banned corporate transactions in virtual assets. The government’s decision at the time was driven by concerns about money laundering, given that companies’ trading was seen as higher risk compared to individual trade.

On December 13, 2017, The Korean government announced emergency measures In response to the growing local currency market.

Investment funds circulating in the local list contain more than 10 % of the “currency theme”: FSS

FSS guidelines are interpreted as the recent rapid increase in the “currency subject” shares, including currency exchanges and mining companies, which are included in ETF markets.

Among the listed local investment funds, there are many products with virtual shares related to assets that exceed 10 %, the report indicated. For example, “ACE US Stock Basseller ETF” carries from Korea’s investment at ACE US BestSeller ETF by 14.59 %.

Likewise, “Koact Us Nasdaq Growth Company Active ETF” also has 7.44 % of Coinbase, 6.04 % of Microstrategy, adding a total of 13.48 % with related shares.

According to those familiar with the industry, these are the negative circulating investment funds that are organized to track directly. Moreover, it is difficult to exclude negative traded investment funds.

“If the shares are excluded arbitrarily without changing the index, the gap rate may rise,” one of those familiar with the industry indicated. “I understand the organizational tone, but it is not easy to respond immediately.”

The local market has also argued that it is not just a fair application of regulatory standards to local investment funds, because they are already making indirect investments through investment funds circulating in investment companies in the United States listed in the United States.

“The restriction of local investment funds only will not stop the flow of funds, and in fact, many investors are already overcoming the market with us in circulating investment funds,” another source indicated. “It is doubtful whether the regulations will actually be effective.”