South Korea’s National Pension Service Invested $2.4M USD In Crypto Exchanges

News, Regulation | January 30, 2018 By:

South Korea’s National Pension Service (NPS) has been indirectly investing in cryptocurrency exchanges, according to a local media report. This was revealed amid South Korean regulators pushing to institute controls on the country’s cryptocurrency market.

NPS is a public pension plan sponsor. It is the third-largest in the world, with $430 billion in assets, and is the largest investor in South Korea. It is responsible for administering insured persons’ personal records, collecting pension contributions, paying benefits, managing the national pension fund, and implementing welfare business for insured persons and beneficiaries. It invests in the public equity, fixed income, and alternative investment markets across the globe. For alternative investments, it invests in infrastructure, real estate, corporate restructuring funds, private equities, and venture capital.

Local news outlet News1 reported that the pension fund has invested 2.6 billion won ($2.4M USD) in four cryptocurrency exchanges operating in the country. NPS has invested in cryptocurrency exchanges in two funds. The first fund invested only in crypto exchanges Coinplug and Upbit. The second one invested in the other two operators, Bithumb and Korbit.

An unnamed NPS officer stated that many institutions invest in the same funds the pension fund invests in, and that fund managers have “an exclusive right to make investment decisions,” not the NPS.

NPS is not the only organization in the country that has been investing in crypto exchanges. Last week, the Ministry of Strategy and Finance revealed that 16 venture investment firms have invested 41.2 billion won ($38.7M USD) in the cryptocurrency market. These investment firms operate 28 out of the 700 medium-sized funds registered in the country.

The Ministry of Strategy and Finance has been trying to discourage small and medium-sized funds from investing in crypto exchanges. The ministry said it is inappropriate for the 16 investment ventures to invest in the 28 venture funds.

Recently, the Financial Services Commission (FSC) announced that the government will officially ban the use of anonymous bank accounts in cryptocurrency trading starting January 30. The new measures will prevent foreigners residing outside South Korea who do not have local bank accounts and minors younger than 19 from buying or selling bitcoins and other cryptocurrencies. Once the new system is in place, existing accounts used for cryptocurrency trading up to now can no longer be used.