South Korea Urges Asset Managers to Limit Crypto Exposure
South Korea’s Financial Supervisory Service (FSS) advised local asset managers to limit exposure to crypto firms, citing concerns over excessive risk. The guidance was informal, acknowledging challenges in adjusting passive exchange-traded funds (ETFs) without index provider approval. Industry participants expressed concerns about the fairness of these expectations, noting that investors can still access crypto exposure through U.S.-listed ETFs. The FSS emphasized that local financial institutions cannot hold or invest in cryptocurrencies until new regulations are established. Despite regulatory caution, there is growing institutional interest in digital assets, as indicated by recent trademark filings for stablecoins by major banks. South Korea's Ministry of SMEs and Startups proposed lifting restrictions on crypto firms accessing financial support, while plans for a stablecoin pegged to the won currency are underway, with a target launch by 2026.
