South Korea’s regulator brings down the ban hammer, again.
South Korea’s primary financial regulator and watchdog has banned securities firms from launching bitcoin futures contracts, according to a local report.
South Korea’s Financial Services Commission (FSC) has reportedly issued a directive banning financial institutions from offering bitcoin futures contracts as a financial product. According to a Business Korea report, the Korean regulator does not recognize bitcoin as ‘an underlying asset of derivatives products’ and is hence restricted from being listed as a financial instrument for futures trading.
The preemptive ban comes ahead of multiple Korean securities firms preparing to introduce bitcoin futures contracts to clients. The Shinhan Financial Investment Co. and eBest Investment & Securities Co have both reportedly cancelled bitcoin futures seminars for interested investors later next week.
“It is the first time for the South Korean authorities to ban trading a specific item,” the report quotes a representative of Korea’s securities industry as stating. “It seems that they made such [a] decision worrying about it if it gets out of control as they haven’t taken a position on cryptocurrency.”
The sweeping ban by Korean regulators is reminiscent of the late September ban on ICOs, following China’s lead in enforcing a complete curb on fundraising through cryptocurrencies.
Meanwhile, the decidedly embracive approach taken by Korea’s neighbor in Japan – laws came into effect in April to recognize bitcoin as a legal method of payment – now sees a major financial house preparing to launch its own bitcoin derivatives product. The Tokyo Financial Exchange, which counts the likes of JPMorgan Chase among its trading participants, is pressing ahead to list its bitcoin futures contracts by mid-2018.
On Sunday, Chicago-based Cboe will launch bitcoin futures contracts – becoming the first regulated U.S. exchange to do so. The exchange stole a march on city-rival CME, which will list its own bitcoin futures product on December 18. New York’s Nasdaq, the world’s second-largest stock market, is also planning to list bitcoin futures contracts before mid-2018.
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