(Bloomberg) — South Korea sought to choke off a potential flood of speculative cash heading to US spot Bitcoin exchange-traded funds, stoking confusion and roiling a slew of stocks.

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The Financial Services Commission, the country’s securities regulator, said Thursday that brokering such ETFs may violate the existing government stance on virtual assets and its capital markets law. Wizit Co. plunged as much as 13% and other crypto-related stocks tumbled in early Friday trading.

This is one of the first cautious responses from a major regulator after the US Securities and Exchange Commission green lit around a dozen ETFs to directly hold Bitcoin earlier this week. South Koreans are famous for embracing crypto assets and a digital assets bill was approved last year to bolster investor protection. Consumer safeguards have been in focus since the more than $40 billion implosion of tokens created by Do Kwon.

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The FSC said it plans to further review digital-asset rules as overseas regulation changes.

The batch of US spot Bitcoin ETFs — including offerings from investment powerhouses BlackRock Inc. and Fidelity Investments — got off to a strong start, with some $4.6 billion of shares changing hands in a frenetic Wall Street debut Thursday. Industry backers see the ETFs as the ultimate springboard for broader mainstream adoption by everyday investors and the catalyst for further gains.

–With assistance from Youkyung Lee.

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