South Korea’s Top Exchange Says It’s Ready For Bitcoin Etfs, But Regulators Still Stalling

What Happened

Korea Exchange chairman Jeong Eun-bo announced plans to launch crypto ETFs and extend trading hours to 24/7 operations during the bourse’s first trading session of 2026.

According to the local report, Jeong told attendees at the Korea Exchange’s Seoul headquarters that new investment products, including virtual asset ETFs and derivatives, would be introduced as part of efforts to overcome the “Korea Discount” and upgrade the capital market.

The Korea Exchange’s readiness to launch crypto products contrasts sharply with regulatory delays that have stretched back years.

Beyond stablecoins, the draft law would introduce strict investor protections, including full-reserve custody requirements, and raise compliance standards for crypto service providers to match those in traditional finance.

The ruling Democratic Party introduced legislation in June to amend the Capital Markets Act, expanding the definition of underlying assets for ETFs to include Bitcoin and other digital currencies.

Market Context

A separate bill proposed legalizing stablecoin issuance by domestic firms with a minimum capital of 500 million won.

Why It Matters

The Financial Services Commission submitted a roadmap in June proposing spot crypto ETFs for late 2025, but the plan has yet to materialize.

The FSC has resisted the fixed threshold, warning it could sideline technology firms and slow innovation in digital payments.

Initial coin offerings banned since 2017 could return under strict disclosure rules.

The regulator found failures in customer identification, unauthorized transactions with unregistered overseas platforms, and inadequate money-laundering risk assessments for new products.

Bithumb, Coinone, and GOPAX remain under review as the FIU works through cases in inspection order, with total fines across the sector expected to reach hundreds of billions of won.

Details

The pledge arrives as South Korea’s financial regulator and central bank remain locked in a prolonged dispute over stablecoin issuance rules that have pushed comprehensive digital asset legislation into next year.

He also committed to deploying AI-based monitoring systems and strengthening crackdowns on stock manipulation through a joint response team.

Korea Exchange Ready, Regulators Still Divided

Meanwhile, South Korea’s comprehensive Digital Asset Basic Act remains stalled in 2026 after the Financial Services Commission and Bank of Korea failed to reach an agreement on stablecoin governance.

The central bank insists that stablecoins should be issued only by bank-led consortia, with lenders holding at least a 51% ownership stake.

Regulators also disagree on whether a new licensing committee is needed for stablecoin oversight.

Stablecoin issuers would be required to hold reserves entirely in bank deposits or government bonds, with 100% of those reserves entrusted to licensed custodians.

The regulatory impasse continues despite strong political momentum from President Lee Jae-myung’s administration, which campaigned on easing digital asset restrictions.

However, Bank of Korea Governor Rhee Chang-yong has opposed the development of non-bank stablecoins due to monetary policy concerns.

Enforcement Drive Continues Across Major Exchanges

While policy debates drag on, enforcement actions have accelerated.

The Financial Intelligence Unit imposed a ₩27.3 billion fine on Korbit in late December following approximately 22,000 anti-money laundering violations identified during October inspections.

The Korbit penalty followed earlier sanctions against Upbit operator Dunamu, which received a three-month suspension on new customer accounts in February and a ₩35.2 billion fine in November.