• Coinbase shares being purchased ‘indirectly’ by a South Korean sovereign wealth fund

  • Although it has now distanced itself from crypto-related interests, a South Korean sovereign wealth investment fund has “indirectly” bought shares in the listed American crypto exchange firm Coinbase.

    The Korea Investment Corporation (KIC), a sovereign wealth fund formed by the government in 2005, made the decision. It was given the task of “improving” the nation’s long-term “purchasing power” by investing public funds in international financial markets when it was established.

    Because Coinbase went public on the Nasdaq stock exchange in spring 2021 – and because mainstream financial gurus have identified it as a firm to monitor – the South Korean government now theoretically holds a USD 1.9 million stake in the company.

    According to Yonhap, Morgan Stanley Capital International, a leading index provider, put Coinbase shares in one of its popular tracking indices in November of last year. Coinbase shares were “automatically incorporated” in the sovereign wealth fund’s portfolio because the KCI invests public funds in this tracker.

    As a result, the South Korean government has acquired 8,700 shares in the American crypto company.

    Cryptocurrency regulation, on the other hand, is a touchy subject in South Korea. After years of strict regulation that culminated in an ICO blanket ban, the virtual eradication of anonymous trading, and harsh crypto exchange monitoring, the two main presidential contenders have hinted at a more business- and crypto-friendly approach to the sector.

    Regardless, the cryptocurrency situation in South Korea is in flux and fraught with controversy, and the KIC was fast to remove itself from crypto-related issues.

    According to a KIC official, cryptoassets are not a viable form of investment for a fund of its sort, and the fund’s move is a “indirect and scarcely substantial investment” in “a cryptocurrency exchange, not in cryptocurrencies.”

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