TechFlow, July 23 — According to the Korean Herald Economy, the Financial Supervisory Service (FSS) of South Korea issued oral guidance to domestic asset management companies at the beginning of this month, requiring them to restrict the expansion of crypto-related companies (such as Coinbase, MicroStrategy, etc.) in ETF portfolios.
The FSS emphasized that the 2017 administrative guidance prohibiting financial institutions from holding, purchasing, guaranteeing, or investing in crypto assets remains in effect. Currently, several South Korean-listed ETFs have exceeded a 10% weighting in crypto-related equities—for example, Coinbase accounts for as high as 14.59% in the "ACE U.S. Stocks Bestseller ETF" managed by Korea Investment & Trust.
The asset management industry stated that passive ETFs cannot unilaterally exclude such stocks without altering the underlying index. Industry players also questioned the effectiveness and fairness of the regulatory measures, noting that South Korean investors are already indirectly investing in crypto assets through U.S.-listed ETFs, and restricting only domestic ETFs will hardly prevent capital flows.
