"Democratic Party of Korea pushes to allow spot virtual asset ETFs… Considering revision of the Capital Markets Act"

The Democratic Party of Korea has reportedly begun work on introducing spot virtual asset (cryptocurrency) exchange-traded funds (ETFs) into the institutional framework by revising the Capital Markets Act.

According to industry sources on the 13th, the Democratic Party is preparing to revise the Capital Markets Act so that virtual assets can be included as underlying assets. The draft amendment has already been prepared and is currently in the final review stage.

This revision is being led by Min Byung-deok, a member of the Democratic Party of Korea, who was the principal sponsor of the “Digital Asset Basic Act.” Earlier, Representative Min held a press conference at the National Assembly Communication Building, expressing his legislative intent to institutionalize digital assets.

The current Capital Markets Act specifies the types of underlying assets that ETFs can track, but virtual assets are not included. As a result, financial authorities have not allowed the listing of spot-based virtual asset ETFs, and the trading of the same ETF products listed overseas is also banned domestically. However, futures-based ETFs are classified as derivatives and are permitted, as they meet the requirements for underlying assets.

This amendment is also in line with President Lee Jae-myung’s campaign pledge to “institutionalize and vitalize virtual assets.” Some expect that legal and regulatory revisions could be completed within the year.