South Korea’s Financial Services Commission (FSC) has taken a significant step towards approving spot cryptocurrency exchange-traded funds (ETFs), officially announcing the formation of a Virtual Asset Committee on October 10, 2024.

The committee, composed of public and private sector experts, will act as an advisory body to review and approve Bitcoin and Ethereum spot ETFs, alongside addressing corporate virtual accounts for digital assets.

The introduction of spot ETFs in South Korea could have a profound impact on the market, particularly in reducing the so-called “Kimchi premium,” a phenomenon where cryptocurrencies trade at higher prices domestically than in international markets.

According to CryptoQuant CEO Ki Young Ju, the approval of spot Bitcoin ETFs will help mitigate this gap by attracting more market makers and arbitrage funds​.​

In addition to its focus on ETFs, the FSC has launched the Digital Asset User Protection Foundation, a non-profit aimed at assisting users in recovering assets when service providers cease operations.

This initiative forms part of broader regulatory efforts designed to enhance investor protection in South Korea’s evolving cryptocurrency market.​

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