South Korea’s FSS Urges Asset Managers to Limit Exposure to Crypto Stocks

Key Points

1. The FSS's advisory, reported by The Korea Herald, was issued in early July 2025 and targets crypto stocks such as Coinbase and MicroStrategy.

2. The guidance is not mandatory, and it does not apply to retail investors.

3. Many South Korean ETFs have significant investments in U.S. crypto firms, with Coinbase shares comprising 14.6% of the ACE US Equity Best Seller ETF.

4. Other affected ETFs include KoACT US Nasdaq Growth Company Active ETF, KoACT Global AI & Robot Active ETF, and TIMFOLIO US Nasdaq 100 Active ETF.

5. The FSS acknowledged that implementing changes, especially for passive ETFs, will be challenging.