South Korea to Permit Institutional Crypto Trading: Report

South Korea is poised to make a significant change in its cryptocurrency investment policies. The Financial Services Commission (FSC) recently revealed plans to permit corporations to invest in digital assets, marking a pivotal development for the nation’s crypto landscape.

Currently, strict regulations limit South Korean companies’ ability to invest in cryptocurrencies, including barriers to opening real-name accounts. The FSC intends to begin relaxing these restrictions, starting with non-profit organizations. The initiative could open up fresh opportunities for businesses within the country.

Rules for Secure Crypto Investments

FSC Director Kwon Dae-young emphasized the importance of establishing clear listing standards and enforcing conduct guidelines for virtual asset exchanges. Under this framework, non-profit entities will gain the ability to invest in cryptocurrencies within a controlled environment.

Following this pilot phase, the FSC aims to roll out new rules for issuing and trading digital assets. These measures seek to create a transparent and secure environment for corporate participation while promoting technological innovation.

To ensure only reliable players participate in the market, the FSC plans to implement safeguards such as shareholder eligibility checks and social credit rating requirements. Moreover, the agency intends to introduce stricter regulations for highly volatile digital assets, including memecoins, to enhance investor protection.

Broader Financial Reforms and Crypto Market Growth

In addition to crypto reforms, the FSC is looking to modernize other aspects of the financial system. For instance, it proposes increasing the cap on stock ownership in non-subsidiaries from 5% to 15%, which would grant businesses greater flexibility and control.

Meanwhile, an October 2024 report by the Financial Intelligence Unit of the FSC revealed a surge in South Korea’s crypto investor base. In the first half of 2024, the number of investors climbed to 7.78 million, reflecting a 21% rise—equivalent to 1.33 million additional participants—compared to the latter half of 2023.

Additionally, South Korea continues to tighten oversight of cross-border cryptocurrency transactions. According to CoinTab, Finance Minister Choi Sang-Mok announced plans to introduce a reporting requirement for businesses engaged in crypto-related cross-border transfers to combat tax evasion and other foreign exchange violations.