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- South Korean law firm IPG Legal clarified that during divorce proceedings, cryptocurrency holdings will be divided as marital assets under the country’s civil law.
- South Korea’s Financial Services Commission (FSC) is reviewing the ban on cryptocurrency exchange-traded funds (ETFs), signaling a potential shift in its regulatory stance.
As per the latest developments, South Korean law firm IPG Legal has recently clarified the law associated with crypto distribution during divorce cases. As per the law firm, married couples in South Korea will be able to divide their crypto holdings during divorce proceedings.
The recent clarification came while responding to clients as the law firm stated that per South Korean law, both tangible and intangible assets would be divided during the divorce. “Under Article 839-2 of the Korean Civil Act, either spouse may request a division of marital assets accumulated during the marriage upon the divorce in Korea,” it noted.
The law firm also pointed to a 2018 ruling by the country’s Supreme Court which confirmed that digital assets will be considered property due to their economic value treated as intangible assets. Thus, cryptocurrencies received during marriage will be part of the marital estate. Thus, spouses aware of their partner’s crypto exchange wallets can initiate a “fact-finding” investigation with the court to determine the value of their holdings.
Tracking crypto investments is simpler than managing traditional cash because blockchain technology securely records all transactions, preventing any external changes or deletions. Additionally, bank withdrawal records and forensic investigations can help uncover the origins of crypto holdings.
Thus, partners will have the option to either cash out their crypto before splitting or directly share the tokens with one another.
South Korea and Crypto ETF Ban
In another development, South Korea’s top financial regulator – the Financial Services Commission (FSC) – stated that its newly formed cryptocurrency committee, and advisory group for digital asset policies, will review the current ban on cryptocurrency exchange-traded funds (ETFs). This shows a major shift from the regulator’s strict opposition to crypto exposure in the traditional financial markets.
Ever since the launch of spot Bitcoin ETFs in the US in January this year, there’s been a growing demand among other institutional players worldwide. Additionally, other Asian markets like Taiwan and Thailand are also considering loosening their regulatory norms allowing local investors to seek exposure to crypto ETFs.
As a result, South Korea’s legislators have been also mulling a change with the winning democratic party as well as the opposition party pledging the approval of local spot Bitcoin ETFs. FSC chair Kim Byung-hwan stated that, along with reviewing ETFs and institutional crypto accounts, he plans to investigate the monopolistic structure of South Korea’s digital asset exchanges, where Upbit holds a dominant position.
Upbit alone currently handles a massive 61% of the trading volumes in South Korea processing more than $1.17 billion on a daily basis.
