According to Cointelegraph: South Korea’s ruling People Power Party (PPP) led by Yoon Chang-hyun has indefinitely postponed its pledge to ease restrictions on cryptocurrencies, including revoking the ban on local spot Bitcoin exchange-traded funds (ETFs), based on local reports.
The PPP previously intended to announce a pledge concerning virtual assets, but the initiative has been indefinitely deferred. According to Chosun Biz, a South Korean news outlet, the decision could be linked to difficulties in achieving alignment with government and financial authorities on cryptocurrency regulation.
The party had reportedly been working on election pledges to delay taxing crypto profits and allow domestic institutions to introduce spot Bitcoin ETFs and make direct investments in cryptocurrencies.
In January, South Korea's financial regulator reiterated its ban that prevents financial institutions from introducing cryptocurrency ETFs and asserted that digital assets don't align with the underlying assets specified in the Capital Markets Act. Therefore, local investors currently face limitations on investing in spot crypto ETFs, while foreign crypto futures products remain accessible.
Despite the recent approval of a spot Bitcoin ETF by the United States Securities and Exchange Commission (SEC), South Korea’s Financial Services Commission (FSC) maintains a cautious stance, citing concerns about the potential investment risks of digital assets.
Meanwhile, South Korea’s main opposition party, the Democratic Party, recently announced its crypto campaign promises ahead of South Korea’s general election, which is scheduled to happen on April 10.
The PPP is also said to have considered delaying taxation on virtual assets for two years and allowing corporate investments in digital assets. However, due to inadequate consultation with the relevant authorities and concerns about potential significant investment losses, this idea has not been finalized as a pledge.
South Korea's primary financial regulator, the Financial Supervisory Service (FSS), is planning to seek guidance from the U.S. SEC regarding spot Bitcoin exchange-traded funds. FSS chief Lee Bok-hyun has outlined a 2024 business plan involving key financial market visits, including New York, intending to focus on discussing South Korean financial markets and spot Bitcoin ETFs.