South Korea’s Financial Services Commission (FSC) has recently announced a significant policy shift that will gradually open up the crypto market to corporations. This marks a departure from the long-standing ban on institutional trading that has been in place for several years.
The new policy, unveiled during the third meeting of the Virtual Asset Committee, will allow select entities to trade digital assets in a phased approach starting this year. The FSC plans to first permit government agencies, non-profit organizations, and crypto exchanges to conduct crypto sales for liquidation purposes in the first half of 2025. By the second half of the year, approximately 3,500 registered professional investment firms and publicly traded companies will be able to participate in crypto trading through a pilot program.
Corporate trading of digital assets has been heavily restricted since 2017 due to concerns about market speculation and money laundering risks. However, the enactment of the Virtual Asset User Protection Act in July 2024 provided a regulatory framework for expanding access to institutional players. The FSC noted increasing demand from domestic businesses for blockchain-related ventures and highlighted that major economies already allow institutional participation in crypto markets.
To address potential risks, the FSC plans to introduce stronger anti-money laundering measures, independent custody requirements, and mandatory disclosures. Banks and exchanges will carefully evaluate corporate applicants before granting accounts to ensure compliance with financial regulations.
In addition to the policy shift on institutional trading, the committee also discussed concerns about the rapid listing of new cryptocurrencies on domestic exchanges, which has contributed to price volatility. The FSC intends to introduce stricter listing criteria and transparency measures to prevent market manipulation.
Furthermore, the meeting reviewed legislative efforts to regulate tokenized securities under South Korea’s Capital Markets Act. Lawmakers are considering amendments to legally recognize distributed ledger-based financial instruments, a move that could further integrate blockchain technology into the country’s financial system.
The FSC will collaborate with financial regulators, banking associations, and crypto exchanges to finalize implementation details. While this roadmap represents a significant policy shift, the broader participation of corporations in crypto markets will be contingent on further regulatory evaluations and market conditions.
This article has been rewritten to provide a unique perspective on South Korea’s evolving crypto regulatory landscape, focusing on the FSC’s recent decision to open up the market to corporations.