FSS is required by Korea S. Investment Funds for Reducing Exposure to Metr and MSTR star-news.press/wp

benamira July 23, 2025

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FSS is required by Korea S. Investment Funds for Reducing Exposure to Metr and MSTR star-news.press/wp

South Korea’s financial supervision service (FSS) has strengthened its restricted approach to encryption investments, and directing local asset managers to balance their money circulating on the stock exchange (ETFS). The latest reports indicate that the International Financial Supervisory Agency has issued instructions to investment companies to reduce their exposure to encryption companies such as Coinbase and the strategy.

South Korea tightens a grip on encryption investments

According to the latter Herald Korean reportFSS in South Korea has warned asset managers of balanced investment funds and reducing exposure to companies such as Coinbase and the strategy. The organizers have advised that these platforms “do not include” coding stocks such as Coin and MSTR in their governor.

It is worth noting that the FSS guidance reaffirms the advice of 2017 on virtual currencies, while emphasizing that organized financial institutions are still prohibited from investing in digital assets. This step seems to contradict the previous indicators that the South Korean regulator was exploring ways to alleviate the requirements of digital asset trading, and instead enhance the strict rules on encryption investments.

Moreover, FSS guidelines prevent financial institutions from keeping, buying or investing in virtual assets, as well as obtaining them as a guarantee. An official stated,

Recently, there has been a trend of abolishing restrictions on virtual assets in the United States and Korea, but specific laws or instructions have not yet been set. This means that the current instructions should be followed until the new system is completed.

South Korea is said to show a positive shift, as it has moved away from its informal ban on the trading of institutional encryption. Especially after the election of the quarter -supporter president Lee Jay Mion, the country has accelerated its efforts to renew the encryption regulations. As Coingepe previously mentioned, South Korea announced plans to recognize encryption companies as project companies, allowing government support, tax benefits and financial incentives.

Organizational concerns about the coded stock shares

The ETF market in South Korea has achieved a great landmark with more than 1,000 listed boxes, however, the FSS service has provided guidelines that seem to be aimed at the increasing presence of shares related to the encrypted currency in the traded investment funds.

This development is especially noticeable, given the large encryption market in South Korea, which includes 18.25 million investors and is known for its active retail for retail. FSS may reflect the concerns about the rapid growth of “currency” shares, including those for encryption exchange and mining companies, and their potential impact on the ETF market.

Many local investment funds are said to have a large exposure to virtual shares related to assets, with some allocating 10 %. For example, the best -selling ECE ETF has ACE US -59 % in Coinbase. Likewise, Koact Us Nasdaq Growth Company Active ETF has a 7.44 % stake in Coinbase and 6.04 % strategy.

The industry returns to the regulations

The encryption space is still concerned about strict encryption regulations, as it may hinder the country’s progress in the digital asset market. It is worth noting that the country’s cautious approach comes in the wake of progressive developments. For example, Parataxis Holdings announced plans to launch the first Bitcoin Ministry company in South Korea by obtaining a majority share at Biotech Bridge Bridgeutics for $ 18.5 million.

Those who are familiar with the industry note that the negative circulating investment funds, which aim to repeat an indicator, cannot easily exclude some shares without deviating from the goal of their investment. Players in the local market also claim that it is not fair to impose regulatory standards only on local investment funds, as they are already investing indirectly in encryption through the investment funds circulating in the United States.

They said: “Restricting local investment funds only will not stop the flow of money, and in fact, many investors already exceed the market with us in circulating investment funds. It is doubtful whether the regulations will be effective in reality.”