ChainCatcher reported that according to The Block, a South Korean financial research institute stated in its latest report that the introduction of a cryptocurrency spot ETF may bring more troubles to the country's economy than benefits.

“Allowing (such) products could lead to side effects such as inefficient resource allocation, increased risks associated with cryptocurrencies in financial markets, and weakened financial stability,” the Korea Institute of Finance (KIF) said in a report on Sunday.

The agency explained that crypto ETFs could lead to the crypto market intercepting a large amount of cash flow from the local financial market, resulting in a reduction in investment in the local industry. KIF added that this could make the local financial market more vulnerable to crises in the crypto industry, leading to increased investor distrust in the market and regulators.