South Korea Stock Exchange Chairman, Jeong Eun-bo, has announced plans to explore the approval of crypto-based exchange-traded funds (ETFs) as part of the exchange’s “value-up program” to address ongoing market challenges. The announcement was made at the 2025 Securities and Derivatives Market open ceremony on January 2.
In his address, Jeong highlighted the significant challenges faced by the South Korean capital markets in 2024, which have weakened the growth potential of local companies. He attributed this to global conflicts and domestic political developments, which have resulted in a sluggish market compared to major countries. Despite the unfavorable economic conditions, Jeong emphasized the exchange’s commitment to promoting its value-up program to engage more leading companies and establish a management culture centered on shareholder value.
Furthermore, Jeong revealed that the Korea Exchange will be looking to benchmark overseas cases for new business avenues such as crypto ETFs and explore new territory in the capital market. This comes as a significant development, considering that crypto ETFs have been banned in South Korea since 2017. The country’s regulator, the Financial Services Commission (FSC), had reaffirmed its stance on the ban, but signaled a potential shift in October when it announced the formation of an advisory group to review digital asset policies.
The push for institutionalization of crypto in South Korea comes at a time when the country is facing a political crisis. President Yoon Suk Yeol declared the first emergency martial law in four decades in December, accusing the opposition Democratic party of sympathizing with North Korea and engaging in anti-state activities. The National Assembly voted to nullify the declaration and impeached both President Yoon and Prime Minister Han Duck-soo.
The political turmoil has put a halt on new regulations related to digital assets, with the market failing to cross various regulatory thresholds for years. The resolution of the political crisis is expected to take a few months, during which time crypto-related regulations will remain on hold. The Constitutional Court is set to determine whether to remove President Yoon from office or reinstate him, with at least six justices on the nine-member court needing to vote in favor for removal.
Overall, South Korea’s reconsideration of crypto ETFs in 2025 amid global demand reflects a shifting landscape in the country’s approach to digital assets and the capital market. As the market continues to evolve, stakeholders will be closely watching for further developments and potential regulatory changes in the coming months.