South Korea Cracks Down: Regulators Demand Asset Managers Slash Crypto Stock Holdings (Coinbase, MicroStrategy in Focus)
Seoul tightens the screws as volatile crypto-linked equities face scrutiny.
The Financial Services Commission (FSA) isn't mincing words—asset managers are being told to dial back exposure to 'high-risk' crypto-correlated stocks. No more riding the Bitcoin rollercoaster with OPM (other people's money).
Coinbase and MicroStrategy—the poster children for crypto beta plays—are squarely in the crosshairs. Because nothing says 'prudent risk management' like chasing 100% weekly swings in a bear market.
This isn't Korea's first rodeo with crypto curbs. Remember the 2021 exchange licensing purge? The FSA clearly hasn't forgotten the smell of burning leverage.
One fund manager quipped (off the record): 'They want us to avoid volatility? Maybe they should ban KOSDAQ while they're at it.'
Bottom line: When regulators start treating crypto stocks like cigarettes—warning labels and all—you know the party's getting too rowdy for the institutional babysitters.
Mixed signals amid broader policy reevaluation
The timing of the guidance has sparked confusion, as it follows recent reports suggesting that the FSS was considering loosening some restrictions related to crypto trading. The regulator’s stance appears contradictory, especially amid growing global regulatory clarity and the rise of institutional crypto exposure in markets like the U.S.
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An unnamed FSS official told the Korean Herald that despite evolving international frameworks, domestic institutions must still comply with current South Korean rules. The statement reinforces that regulatory reform, while under discussion, remains incomplete and unenforceable until formally revised.
South Korea’s mixed messaging could stall institutional momentum just as crypto assets and equities tied to the sector see increased global adoption.
