Coinbase, Strategy named as South Korea warns against crypto-heavy ETF portfolios
The post Coinbase, Strategy named as South Korea warns against crypto-heavy ETF portfolios appeared on BitcoinEthereumNews.com. South Korea’s Financial Supervisory Service has verbally instructed local asset managers to limit exposure to crypto-linked stocks such as Coinbase and Strategy in ETFs, citing a 2017 policy that bars institutional investment in virtual assets. Summary South Korea’s FSS has informally directed asset managers to reduce ETF exposure to crypto-linked stocks like Coinbase and Strategy. It cites a 2017 policy banning institutional investment in virtual assets, despite ongoing regulatory reform. The directive comes as South Korea begins phasing out its ban on institutional crypto trading. According to the Korean Herald, the FSS delivered this guidance informally to several firms earlier this month. The instruction reportedly targets holdings in companies like Coinbase and Strategy, formerly MicroStrategy, which are often included in ETFs tracking crypto-related industries. While not a formal enforcement action, the warning reaffirms that asset managers must continue observing the Financial Services Commission’s standing directive from 2017. Why has the FSS issued this instruction now? The FSS stated that, despite ongoing discussions around reform, regulated financial institutions must follow existing guidelines until new laws are formally adopted. The 2017 administrative notice prohibits such institutions from directly holding, purchasing, or investing in virtual assets or companies primarily involved in the sector. The recent advisory was prompted by a noticeable uptick in domestic ETFs allocating large portions of their portfolios to crypto-exposed firms. As an example, the Korean Herald referenced Korea Investment Management’s ‘ACE U.S. Bestseller ETF’, which holds over 14% in Coinbase shares, adding that several other active and passive funds have similarly high concentrations in related companies. Officials have acknowledged that passive ETFs cannot easily remove specific stocks unless the underlying index changes. Still, they urged firms to be cautious in designing new ETF products. The FSS said the intention was to prevent overexposure ahead of a formal regulatory overhaul.…
The post Coinbase, Strategy named as South Korea warns against crypto-heavy ETF portfolios appeared on BitcoinEthereumNews.com.
South Korea’s Financial Supervisory Service has verbally instructed local asset managers to limit exposure to crypto-linked stocks such as Coinbase and Strategy in ETFs, citing a 2017 policy that bars institutional investment in virtual assets. Summary South Korea’s FSS has informally directed asset managers to reduce ETF exposure to crypto-linked stocks like Coinbase and Strategy. It cites a 2017 policy banning institutional investment in virtual assets, despite ongoing regulatory reform. The directive comes as South Korea begins phasing out its ban on institutional crypto trading. According to the Korean Herald, the FSS delivered this guidance informally to several firms earlier this month. The instruction reportedly targets holdings in companies like Coinbase and Strategy, formerly MicroStrategy, which are often included in ETFs tracking crypto-related industries. While not a formal enforcement action, the warning reaffirms that asset managers must continue observing the Financial Services Commission’s standing directive from 2017. Why has the FSS issued this instruction now? The FSS stated that, despite ongoing discussions around reform, regulated financial institutions must follow existing guidelines until new laws are formally adopted. The 2017 administrative notice prohibits such institutions from directly holding, purchasing, or investing in virtual assets or companies primarily involved in the sector. The recent advisory was prompted by a noticeable uptick in domestic ETFs allocating large portions of their portfolios to crypto-exposed firms. As an example, the Korean Herald referenced Korea Investment Management’s ‘ACE U.S. Bestseller ETF’, which holds over 14% in Coinbase shares, adding that several other active and passive funds have similarly high concentrations in related companies. Officials have acknowledged that passive ETFs cannot easily remove specific stocks unless the underlying index changes. Still, they urged firms to be cautious in designing new ETF products. The FSS said the intention was to prevent overexposure ahead of a formal regulatory overhaul.…
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