South Korean regulators require investment institutions to limit their exposure to certain exchanges and crypto-related companies such as Strategy

BlockBeats News, July 23 — According to The Korea Herald, the Financial Supervisory Service (FSS) of South Korea has recently instructed local asset management companies to adjust their exchange-traded funds (ETFs) to limit exposure to certain exchanges and crypto-related companies such as Strategy. The regulator stated that asset management companies must comply with the administrative guidelines issued by the Financial Services Commission (FSC) in 2017, which prohibit regulated financial institutions from holding, purchasing, or making equity investments in virtual assets.

This directive from local regulators has sparked complaints among domestic financial participants, who argue that it creates an unfair competitive environment, as retail investors can invest in U.S. ETFs by purchasing shares in cryptocurrency companies. An official from the FSS stated that even if regulatory requirements change in the U.S. and South Korea, institutions must adhere to the existing guidelines until new regulations are introduced.

The Financial Supervisory Service is responsible for overseeing South Korea’s financial industry, with a focus on the day-to-day supervision of various financial entities. It serves as the executive body of the country’s top financial regulator, the Financial Services Commission (FSC).