Bitcoin ETF Momentum Builds in South Korea but Regulation Lags Behind

South Korea’s securities and derivatives exchange operator, Korea Exchange (KRX), plans to increase its new investment products, including crypto exchange-traded funds (ETFs) and derivatives, as part of a broader push to modernize capital markets. 

Speaking at the first trading day ceremony of the new year, KRX chairman Jeong Eun-bo the exchange was operationally prepared to support crypto ETFs, even as regulators continued to deliberate whether such products could be approved under existing securities regulations. 

Jeong framed the move as part of South Korea’s efforts to move beyond the “Korea discount,” a phenomenon where domestic stocks trade at lower valuations than global peers. The dynamic is different in crypto, where Bitcoin often trades at a premium on local exchanges compared with overseas platforms.

He also pointed to other initiatives such as a gradual shift toward 24-hour trading and digital finance readiness.

While the new year speech did not announce new regulatory approvals, it highlighted growing coordination between market operators and policymakers as the country evaluates whether crypto can be integrated into its traditional financial system.

Infrastructure ready, regulation still undecided

KRX’s comments came as South Korean regulators continued to review the legal status of crypto-based investment products. 

Under current rules, crypto assets are not classified as eligible underlying assets for securities, effectively blocking crypto-based ETFs despite increasing investor demand. 

The Financial Services Commission through a dedicated crypto committee, including whether digital assets could be recognized within the framework of the Capital Markets Act.

While regulators weigh these decisions, KRX’s messaging suggests that market infrastructure may no longer be a limiting factor. By publicly signaling readiness to list and trade crypto-linked products, the exchange is positioning itself to move quickly once regulatory barriers are cleared. 

Related:

Crypto ETFs built momentum, but approvals remain stalled

Support for crypto ETFs has been building across the country’s financial and political establishment over the past year. 

In February, the head of the Korea Financial Investment Association (KOFIA) said the industry will Bitcoin and Ether ETFs domestically to meet growing demand from investors seeking regulated exposure to crypto. 

The issue later entered mainstream politics ahead of the June presidential election. In May, Lee Jae-myung, who was the Democratic Party’s presidential front-runner, if elected. Lee went on to win the election. 

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