Korean Exchange KRX prepares to list crypto-linked ETFs and derivatives

The Korea Exchange (KRX) is planning to launch additional investment products, including crypto-oriented ETFs and derivatives. On the first official trading day of the year, Jeong Eun-bo, KRX’s chairman, indicated that the exchange is prepared to handle crypto ETFs, even as regulators evaluate their legitimacy under current rules.

“We have built market infrastructure, and we are ready to list and trade crypto‑linked ETFs,” Jeong said. He also announced plans to increase trading hours.

South Korea is still evaluating crypto regulations                                                                                                                                            

According to Jeong, South Korea’s new exchange initiative is designed to help counter the “Korea discount,” the tendency for South Korean equities to be priced beneath their global peers. In the cryptocurrency market, Bitcoin often trades at a premium in South Korea compared to international markets.

He remarked, “Our capital market is on pace for normalization, with the benchmark KOSPI breaking the 4,000-mark point and other market indexes, such as PER (price-to-earnings ratio), showing signs of improvement. The local capital market should overcome the ‘Korea Discount’ and advance into the premium market.”

In his speech, however, Jeong did not announce regulatory changes, although he emphasized the need for increased collaboration between market operators and policymakers. He added that the exchange plans to roll out an AI-based monitoring system and step up its crackdown on unfair trading through a joint response team formed last year to combat stock price manipulation.

Regulators in South Korea are still gauging the legal status of crypto investment products. Currently, regulations do not permit crypto assets to be classified as qualifying underlying securities, and thus, bar crypto ETFs, despite rising interest from investors.

The FSC has mentioned that it is considering reforms through a dedicated committee to determine whether digital assets could be incorporated into the Capital Markets Act framework.

Although the much-awaited DABA, which was expected to implement broad norms for the cryptocurrency trading and issuance arena, has been pushed back amid unresolved questions regarding stablecoin regulation. Authorities have officially delayed the submission of the bill until 2026. 

At the core of the proposal is a no-fault liability, which could imply that digital asset providers need to be held responsible for their losses even without any wrongdoing to substantiate the claim. The proposal also seeks to address systemic risks in stablecoins by mandating that issuers hold reserves of more than 100% of the tokens in circulation in either banks or certified entities. However, a consensus has still not been reached on which body should be responsible for reserve rules and oversight.

Nonetheless, over the last 12 months, support for crypto products, particularly ETFs, has grown throughout South Korea’s financial and political circles. Last February, the leader of the Korea Financial Investment Association (KOFIA) stated that the sector plans to explore domestic Bitcoin and Ether ETF listings, aiming to grant regulated access to the market for cryptocurrencies. The subject gained political traction ahead of the June election. In May, Lee Jae-myung, the Democratic Party’s presidential candidate at the time, pledged to approve spot crypto ETFs if he was elected — a race he ultimately won.

The KRX appointed new executive managers

Recently, the Korea Exchange (KRX) appointed new executive managers to enhance its market surveillance capabilities. The new appointments will boost leadership in the Market Surveillance Division and accelerate efforts, including extended transaction hours and increased product listings.

The exchange also recently filled executive positions across its core divisions: securities, derivatives, market surveillance, and clearing and settlement. Park Sang-uk, formerly the deputy head of Derivatives Markets, has been appointed senior managing director of the Clearing and Settlement Division. Additionally, two managing directors were appointed in each of the Market Surveillance, KOSDAQ Market, and Derivatives Market divisions, totaling six.

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