Unprecedented Move: South Korea, Singapore, and Thailand Block US Bitcoin ETFs
Asian regulators typically approve SEC-approved fund offerings. However, crypto crime waves in Hong Kong and other areas may have led to officials being cautious. It is believed that they could be safeguarding their home turf, which happens to be the fastest growing ETF market in the world.
Although there was significant excitement surrounding the approval of Bitcoin ETFs this month, Asian regulators were underwhelmed by the breakthrough offerings. Watchdogs in South Korea, Singapore, and Thailand promptly cautioned brokerages against allowing clients to invest in these overseas offerings from Fidelity, Ark Invest, and BlackRock’s iShares unit. Additionally, Taiwanese regulators stated that ETFs must include “securities,” excluding Bitcoin under their nation’s rules.
This was surprising to market players, as Asia is the fastest growing ETF market in the world. Jason Titman, the COO of Swyftx, an Australian crypto exchange, noted that outright bans of US-approved ETFs are essentially unprecedented. He suggested that regulators may be protecting retail investors from fraudulent practices and trying to fend off Wall Street’s offerings to give homegrown efforts time to catch up.
According to Justin D’Anethan, a Hong Kong-based senior executive at Keyrock, regulators may be cautious due to questions surrounding how these ETFs fit within existing digital assets regulation and how they monitor retail and professional interaction with crypto. Furthermore, they may be trying to protect home markets and are possibly buying time to launch their own crypto-linked products on local exchanges.
It is speculated that Asian regulators fear the US Bitcoin ETFs may spark a rush of investors before adequate safeguards can be put in place. They may also be seeking to protect their own crypto-linked products on local exchanges. This is a stark contrast to the usual freewheeling capitalism associated with the continent. The Asia Pacific region has become the fastest growing market for exchange-traded funds over the last five years, with ETF uptake growing almost 19% in Asia compared to about 14% in the rest of the world, attracting over $1 trillion in investments, citing data from PwC.
The pushback from Asia has prompted conflicts and confusion, with some officials urging reconsideration of their position. With crypto advocates urging authorities to expedite the approval process for Bitcoin ETFs, Asian nations may feel pressured as crypto continues to flex in a new bull market. The issue may put ordinary investors at a disadvantage.
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