(INTERVIEW) Korea Should Approve Bitcoin Spot ETF to Boost Cryptocurrency Growth: HashKey Global

The Korean digital asset market is one of the most active and mature in the world

By Lee Kyung-min

The approval of bitcoin-based ETFs will strengthen the Korean digital asset market and strengthen the country’s position on the international stage, an executive at a global cryptocurrency exchange said.

According to Ben El-Baz, Global Managing Director of HashKey, swift legislative action to end the years-long regulatory stalemate will help grow the Korean cryptocurrency market, one of the most active and mature in the world, with high user penetration, widespread adoption, and large trading volumes.

He added that the use of cryptocurrency exchanges for illegal activities, including terrorism financing or espionage by North Korea, can be curbed through more stringent KYC (Know Your Customer) and anti-money laundering (AML) compliance practices.

“If Korea takes a more proactive stance on approving spot trading of Bitcoin ETFs, it will further enhance the growth potential of its cryptocurrency market and its international competitiveness,” El-Baz told The Korea Times.

In his opinion, the Korean cryptocurrency market has significant growth potential.

“Korea is poised to play a more important role in the global cryptocurrency space, supported by continuous technological innovation and an adaptive regulatory framework.”

He added that as the market matures, clearer policies will make Korea an important bridge between blockchain technology and traditional economic models.

“More startups and fintech companies will accelerate innovation, fueling local economic growth and strengthening Korea’s competitiveness in the global tech arena.”

HashKey Global is the flagship digital asset exchange within the HashKey Group. It offers licensed digital asset trading services to global users. HashKey Global is licensed in Bermuda, one of the largest offshore financial and reinsurance centers in the world. It does not operate in the United States, mainland China, Hong Kong, or certain restricted countries or regions.

A bustling market

The managing director noted the enthusiasm of Korean investors, as evidenced by the fact that active cryptocurrency users make up over 11 percent of the total population.

“Almost everyone is familiar with Bitcoin, and younger generations are especially open to new projects,” he said.

The dynamics of the market is also evidenced by the fact that the trading volume on Korean cryptocurrency exchanges sometimes exceeds the trading volume on the main KOSPI stock exchange.

Korea consistently ranks in the top three in global cryptocurrency trading volume. The Korean cryptocurrency market is known for its vibrant investor community and technological innovation, making a significant impact on the global stage.”

He added that strong, consistent market sentiment had prompted financial regulators to take proactive measures to protect stakeholders.

“The Korean government has taken a pragmatic and gradual approach to formulating cryptocurrency regulations, ensuring market transparency and security.”

However, challenges remain.

The development of new financial services and products may encounter obstacles caused by a complex regulatory environment.

An example is the relatively low enthusiasm of Korean investors towards decentralized asset management and decentralized finance (DeFi).

Another problem is the inherent volatility of the cryptocurrency market, combined with regulatory uncertainty — a recipe for increased risk.

“The government has implemented numerous measures to protect investors. However, there is still a need to strengthen investor education and develop more robust protection mechanisms to combat market fraud and hacking.”

Spot Bitcoin ETF

Many countries continue to promote the listing of spot Bitcoin ETFs to adapt to the rapidly changing dynamics of the cryptocurrency market.

He believes that if Korea embraces the global wave of regulations aimed at classifying digital coins as a legal asset class, it could benefit from a number of things.

“The transparency and legality of the Korean cryptocurrency market can be improved, strengthened by a legal framework for compliance and transparency. This, in turn, will strengthen the credibility of the market, encouraging more compliant trading.”

He added that capital inflow will increase, which will create a healthy market in an investor-friendly environment approved by the government.

“The approval of spot Bitcoin trading will encourage startups and fintech companies to innovate, making Korea more competitive in the global tech arena.”

Strong regulation is key to protecting investors. But flexible and timely regulatory adjustments are equally important to ensure Korea fully leverages its technological and market infrastructure advantages in the cryptocurrency space, he said.

“Early entry into the spot trading market will help Korea remain competitive in the cryptocurrency space while also gaining an advantage in terms of new market trends.”

Compatibility

He added that it is necessary to strengthen the implementation of KYC and AML practices so that cryptocurrency exchanges can better comply with regulations, which is closely linked to national security issues.

“Major market participants should work with relevant parties to establish and maintain clear compliance standards, actively monitor suspicious trading activities, and share information with law enforcement.”

This recommendation was in response to criticism of Binance.

The world’s largest cryptocurrency exchange has been implicated in illegal activities by North Korea and terrorist groups, raising serious national security concerns in Korea.

Changpeng Zhao, the exchange’s founder and former chief executive, could face up to three years in prison after pleading guilty to failing to report more than 100,000 suspicious transactions with designated terrorist groups.

El-Baz said exchanges could implement user education programs to further raise public awareness of the risks associated with illegal activity.

“With these measures, exchanges will be able to contribute to building a safe and transparent market environment, alleviating national security concerns.”

HashKey Global offers a compliant quote system, trading tools such as LaunchPad, contracts and leverage.

The company independently holds client funds, providing institutional-grade protection.