South Korean Pension Fund Says It Has No Plans to Invest in Crypto – For Now

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Tim Alper

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Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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September 29, 2024

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The South Korean state pension fund has claimed it has no plans to invest in cryptoassets for the time being, despite its recent purchases of crypto-related shares.

Per the South Korean media outlet Money Today, the National Pension Service (NPS) explained that its recent purchases of Coinbase and MicroStrategy stocks were made “automatically.”

South Korean Pension Fund: We Do Not Plan to Buy Crypto

The fund said it uses index management tools that manually track the benchmark Morgan Stanley Capital International Index (MSCI).

The fund also said it uses services that “entrust individual corporate investments to consignment management [providers].”

As such, the NPS made the buys when Coinbase and MicroStrategy stocks were “included in the relevant benchmark indices” or selected by the consignment management providers.

Bitcoin Not an Investment Target, Claims S Korean Pension Fund

Last year, the NPS’ fund managers bought $20 million worth of Coinbase shares. And in August this year, the fund invested $33.75 million in MicroStrategy shares.

“We have no intention of investing in cryptoassets. […] Cryptoassets such as Bitcoin (BTC) are not investment targets for us.”

South Korean National Pension Service

The NPS was speaking in response to a request for comment from the lawmaker Baek Jong-heon.

Baek is a member of the ruling People Power Party and sits on the National Assembly Health and Welfare Committee.

He asked the NPS to report on the “scale and proportion” of its “indirect investment in cryptoassets.”

Coinbase is the United States’ only publicly listed crypto exchange. MicroStrategy, meanwhile, has become the world’s biggest corporate Bitcoin (BTC) investor. The company’s CEO Michael Saylor is a high-profile Bitcoin advocate.

“Of late, media outlets have called the Coinbase and MicroStrategy investments indirect [crypto] investments. But the National Pension Service has never purchased shares in the companies in question in order to invest in cryptoassets.”

South Korean National Pension Service (NPS)

However, the NPS did not distance itself completely from the crypto market. It explained that its fund executives had not done anything to stop the “automatic” purchase of COIN or MXN shares.

“If we want to restrict investment in a specific industry or company group, the Fund Management Committee will make a ruling on the matter.”

NPS

Lawmaker Issues Caution

The NPS also said that if the committee wanted to “exclude companies related to cryptoassets” from its list of companies to invest in, it would need to create a “restriction plan” for such firms.

The fact that it has not yet done so indicates that the committee may well make further investments in crypto-related firms. The NPS concluded:

“We will actively support the Fund Management Committee if it decides to restrict investment in [crypto-related] companies.”

Lawmaker Baek, however, warned that the South Korean pension fund and its committee “should closely review investment policies related to cryptoassets.”

He stated that the NPS needed to “manage risks that may arise in the future” and “consider the volatility” of the crypto market.

We Want More Freedom, Say Firms

South Korean firms are not currently permitted to make direct investments in cryptoassets.

However, with American and Japanese firms now using their balance sheets to buy BTC, Ethereum (ETH), and various altcoins, many in Seoul are urging the government to lift restrictions.

A crypto-keen South Korean IT business owner who spoke to Cryptonews.com on condition of anonymity, said:

“My company – and any other for that matter – should be free to invest our money in whatever assets we choose to. If this is the case in the United States, why aren’t our political leaders taking note?”