“South Korea Needs Bitcoin, Ether ETFs,” Seo Yu-seok Urges

South Korea’s Financial Investment Association (KOFIA) Chairman Seo Yu-seok has intensified calls for the domestic launch of Bitcoin and Ethereum spot index ETFs.

“I think that this year, the domestic stock market should also launch a spot index fund (ETF) based on Bitcoin and Ethereum“, he urged. According to local news outlets, Yu-seok framed the move as crucial to meeting surging demand from older investors while mitigating risks tied to direct crypto exposure.

Speaking at a February 5 press conference in Seoul, Seo emphasized the need to align South Korea’s financial markets with global trends, particularly after the U.S. election of Donald Trump, a vocal advocate for digital assets.

South Korea Regulatory Hurdles Amid Global Shifts

Chairman Seo shed light on the growing appetite for cryptocurrencies across age groups, arguing that digital assets appeals also to older generations.

“While the MZ generation dominates conversations, people in their 50s and 60s also have a lot of interest in and demand for virtual assets.” he stated.

However, he cautioned that older investors who often have access to a larger capital face heightened risks when navigating unregulated crypto exchanges.

“Listing globally recognized Bitcoin and Ethereum ETFs would allow safer, more structured exposure,” Seo added.

South Korea’s Financial Services Commission (FSC) currently bars crypto ETFs, citing its classification of virtual assets as non-securities under the country’s Capital Markets Act.

He further urged regulators to revisit restrictive policies citing Donald Trump’s push for a U.S. national digital assets reserve as motivation. His comments comes amid a recent 450% spike in new crypto exchange registrations in South Korea, with nearly half from investors aged 40 and above.

Domestic Market Pressures and Institutional Barriers

South Korea’s crypto market, ranked among the world’s most active, relies heavily on retail trading due to stringent anti-money laundering (AML) rules. Since 2018, only five exchanges have secured banking partnerships to offer crypto-to-fiat services, locking institutions out of the ecosystem.

A government-led virtual asset committee, launched in October 2024, is now reviewing corporate crypto account permissions and ETF approvals. Recent meetings suggest corporate account guidelines are near finalization.

As U.S. spot Bitcoin ETFs amass $28 billion in assets, South Korea risks falling behind in the crypto market. It is therefore paramount that the country pushes to its modernize regulations and position the nation as a global blockchain innovator.