FSS Warns Against Crypto Stocks Like Coinbase, MicroStrategy

South Korea’s Financial Supervisory Service (FSS) has issued verbal guidance to local asset management firms, urging them to limit exposure to crypto-related stocks such as Coinbase and MicroStrategy within ETF portfolios.

According to The Herald, the directive reaffirms the continued validity of the 2017 administrative guidance on virtual assets, which prohibits financial institutions from holding, purchasing, using as collateral, or investing in such assets.

FSS representatives clarified that although there is a trend toward deregulation in both the U.S. and South Korea, no new legal framework has yet been adopted. Until such legislation is enacted, institutions must comply with the current rules.

The regulator’s stance aims to uphold financial stability and mitigate risks linked to institutional crypto trading. South Korea has banned corporate involvement in virtual asset transactions since 2017, citing concerns related to money laundering and systemic financial risks.