Bitcoin Futures Banned By South Korean Financial Regulator

News, Regulation | December 8, 2017 By:

South Korea’s Financial Services Commission (FSC) has reportedly issued an order banning the trade of bitcoin futures contracts in the country. According to multiple reports, the regulator does not recognize the cryptocurrency as an underlying asset of derivative products so it cannot be a subject for futures trading.

The order, sent through the Korea Financial Investment Association (KOFIA) this week, comes ahead of multiple Korean securities firms preparing to launch derivative products to clients. As a result, securities firms eBest Investment & Securities and Shinhan Financial Investment canceled their seminars intended for bitcoin futures investors, scheduled to hold on December 14 and 15 respectively.

According to an unnamed official from the securities industry, it is the first time for the South Korean authorities to ban trading a specific item. “It seems that they made such decision worrying about if it gets out of control as they haven’t taken a position on cryptocurrency,” the industry official said.

In September, the FSC banned all fund-raising campaigns in the country conducted through initial coin offerings (ICO). The FSC stated at that time that such trading is a “violation of the capital market law,” and an “intensive crackdown” will commence. The regulator also said that it would begin on-site inspections of cryptocurrency companies and seek customer data dating back to December of last year.