## South Korea's FSS Signals Caution on Crypto-Related ETF Holdings South Korea's Financial Supervisory Service (FSS) is reportedly advising domestic asset managers to limit their Exchange Traded Funds' (ETFs) exposure to virtual asset-related companies such as Coinbase and MicroStrategy. This verbal guidance stems from existing 'Emergency Measures Related to Virtual Currencies' implemented in 2017, which restrict institutional investment in virtual assets. The FSS is concerned that some ETFs have allocations exceeding 10% in these stocks. Korea Investment Management's 'ACE US Stock Bestseller ETF', for instance, has a substantial weighting in Coinbase. This regulatory scrutiny highlights ongoing concerns about the volatility and risks associated with cryptocurrency investments, even through indirect exposure via publicly traded companies. While not a formal ban, this guidance suggests a preference for a more cautious approach to cryptocurrency investments within the South Korean ETF market. Asset managers are likely to re-evaluate their portfolio allocations in response to this regulatory signal. ```

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