South Korea’s Financial Supervisory Service (FSS) has directed local asset management firms to limit their exposure to cryptocurrencies, including companies like Coinbase and Strategy.

The verbal guidance, issued earlier this month, instructs firms to follow the 2017 administrative guidelines set by the Financial Services Commission (FSC).

These prohibit regulated financial institutions from investing in virtual assets or related equity.

The directive has drawn criticism from domestic financial entities, who argue that it puts them at a disadvantage compared to retail investors.

Retail investors are still able to access US-based ETFs with crypto exposure.

An FSS official said institutions must comply with the current rules until new guidelines are introduced, despite ongoing regulatory changes in both South Korea and the US.

Recent Coinbase developments