Political campaigns in South Korea are leveraging the country’s prominent crypto market to attract voters ahead of the parliamentary election.
Both major political parties, President Yoon Suk Yeol’s People Power Party and the opposition Democratic Party, have included crypto-related promises in their campaign platforms.
The People Power Party has pledged to delay the implementation of a digital-asset tax, recognizing the importance of the crypto industry to voters.
On the other hand, the Democratic Party has focused on lifting restrictions on exchange-traded funds (ETFs), including those holding US Bitcoin products.
South Korea to Offer Exposure to ETFs
Hwanseok Choi, a policy specialist from the Democratic Party, stated that their manifesto supports the inclusion of both domestic and overseas ETFs, per a Bloomberg report.
The move to allow ETFs investing directly in Bitcoin gained traction after the US approved such products in January.
These Bitcoin ETFs have already accumulated around $57 billion in assets.
However, South Korea’s securities regulator expressed concerns that brokering these products locally might violate the law, creating confusion and impacting the market.
The People Power Party’s manifesto does not directly address this controversy, but it promises to postpone planned taxes on crypto gains beyond the scheduled timeframe of 2025.
South Koreans have actively participated in the recent crypto bull market, and the country is known for its enthusiasm for various cryptocurrencies beyond Bitcoin.
Upbit, the largest domestic crypto exchange, consistently ranks among the top global platforms in terms of trading volume.
Last month, South Koreans invested over $200 million in the shares of MicroStrategy Inc., a US-listed company that holds Bitcoin. They also showed interest in US crypto-futures ETFs, which are permitted products.
South Korean Candidates Own Digital Assets
Interestingly, even election candidates themselves have exposure to cryptocurrencies, with approximately 7% of them owning digital assets, according to a report by Yonhap that analyzed their asset disclosures.
While the crypto market is associated with high risk, the recent surge in its value has overshadowed past failures.
South Korea is implementing an investor-protection framework in July, and both political parties have indicated their intention to pursue broader regulation for the industry.
Just recently, it was reported that South Korea is set to introduce stricter regulations for token listing on exchanges, including the blocking of tokens that have been hacked.
The country’s financial authorities are preparing to release guidelines for virtual asset trading support, expected to be published by the end of this month or early next month.
The upcoming guidelines specify that virtual assets with a history of hacking or security incidents will not be eligible for listing unless the cause of the incident has been adequately explained and the damages have been recovered.
Furthermore, the guidelines state that for overseas virtual assets to be listed, there must be a white paper or technical manual available for domestic use.
An exception provision has been included for virtual assets traded on overseas exchanges for more than two years.
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