South Korea Parties Vow Crypto ETF Access to Win Votes in Elections

As South Korea gears up for its upcoming parliamentary elections, major political parties are incorporating cryptocurrency incentives into their campaign strategies. 

These incentives are particularly aimed at attracting the growing number of crypto-savvy voters in a country where digital asset trading is gaining notable momentum.

South Korea’s parliamentary election campaign is in full swing and crypto is one of the battlegrounds, underlining the nation’s status as a major digital-asset market https://t.co/h4etXW2hto

— Bloomberg Markets (@markets) April 5, 2024

The Democratic Party, which is currently in opposition, has made a brave move by proposing to remove constraints on domestic and international ETFs holding cryptocurrencies, such as the US Bitcoin ETFs. This decision comes after the approval of Bitcoin ETFs in January, a move that was received with skepticism by South Korea’s securities regulator due to possible legal issues.

In a statement to Bloomberg, Hwanseok Choi, a Democratic party representative, supported this policy. The party’s manifesto unambiguously endorses the integration of these ETFs, regardless of their geographical origin, representing a forward-looking view on digital assets.

People Power Party Cressive Tax Strategy

In the meantime, the ruling People Power Party, headed by President Yoon Suk Yeol, may postpone taxation of profits from digital assets until 2025. This action is considered a bid to attract a significant number of cryptocurrency traders and investors within the country.

Data from government sources shows that almost six million people in South Korea, or about 10% of the population, traded cryptocurrency using registered exchanges by mid-2023. This information emphasizes that the crypto vote is of substantial importance in the forthcoming elections since about 7% of the election candidates are said to own cryptocurrencies themselves.

Regulatory Landscape and Investor Protection

However, the rules regarding crypto assets are to be implemented in South Korea despite these election pledges. The local financial regulators will publish the new requirements for token listings at centralized exchanges. The new rules aim to improve investors’ protection by requiring detailed investigations of digital assets affected by hacking and the availability of technical documentation of foreign digital assets listed on domestic exchanges.

The forthcoming Virtual Asset Users Protection Act, which will come into effect on July 19, 2024, is expected to be another step toward regulating the crypto market. This Act restricts unethical activities like market manipulation and illegal trading and imposes harsh punishments, such as imprisonment and fines, for any violation.

Trends in investment in South Korea are another example of the growing interest in cryptos. Korean investors have collectively invested more than $200 million into shares of US-listed MicroStrategy (MRST), a firm known for its significant Bitcoin holdings. This investment pattern is indicative of the growing appetite for crypto assets among South Korean investors.

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