In a significant turning point for the cryptocurrency landscape, South Korea”s Financial Services Commission (FSC) has reportedly finalized new guidelines that permit listed companies and professional investors to engage in cryptocurrency trading. This move effectively concludes a nine-year prohibition on corporate investment in digital assets, coinciding with the government”s broader “2026 Economic Growth Strategy” aimed at fostering innovation and regulatory clarity in the sector.
The newly established regulatory framework allows eligible corporations to invest up to 5% of their annual equity capital in cryptocurrencies. Investment will be restricted to the top 20 cryptocurrencies by market capitalization on South Korea”s five major exchanges, ensuring a focus on the most established assets. Approximately 3,500 entities, including publicly listed firms and registered professional investment corporations, will gain access to this market once the guidelines are implemented.
However, there remains some ambiguity regarding whether dollar-pegged stablecoins, such as Tether”s USDT, will be included in the eligible investment targets. Additionally, regulators are mandating exchanges to adopt staggered execution and impose order size limits, aiming to enhance market stability.
This regulatory shift marks the first time since 2017 that South Korean authorities have signaled a willingness to permit corporate participation in the crypto sector, following previous bans that were largely motivated by concerns over money laundering and market manipulation. The extended prohibition has led to a unique market dynamic where retail investors account for nearly all trading activity, driving capital flight estimated at 76 trillion won ($52 billion) as traders sought opportunities abroad.
In comparison, institutional trading dominates in more mature markets; for instance, at Coinbase, institutional trading constituted over 80% of the volume in the first half of 2024. Industry stakeholders are optimistic that the recent policy change will accelerate the development of a won-denominated stablecoin and the approval of domestic spot Bitcoin exchange-traded funds (ETFs).
While the policy shift has been welcomed, some industry participants argue that the 5% investment ceiling is overly cautious. They point out that countries such as the United States, Japan, Hong Kong, and the European Union impose no similar restrictions on corporate crypto holdings. Critics warn that such limitations could hinder the growth of Digital Asset Treasury companies, which strategically accumulate Bitcoin and other digital assets to enhance corporate value.
One industry official expressed concern, stating, “Applying excessive regulations only to crypto could leave Korea behind as global markets accelerate.” As the FSC prepares to finalize these guidelines in January or February, the timing of implementation will align with the upcoming Digital Asset Basic Act, slated for legislative introduction in the first quarter of 2025. Corporate trading activities are expected to commence by the end of this year.
