South Korea is currently reviewing its prohibition on corporations trading virtual assets
The transition occurs concurrently with implementing and enforcing South Korea’s Virtual Asset User Protection Act.
The Financial Services Commission (FSC) of South Korea has announced its intention to progressively remove the prohibition on corporations trading virtual assets, thereby indicating a new era for the country’s crypto market.
The decision was made following years of stringent regulations prohibiting institutions from participating in cryptocurrency trading. These regulations were initially implemented in 2017 to prevent speculation, money laundering, and market manipulation.
Phased assimilation
The FSC’s approach to integrating corporations into the virtual asset market is progressive. Initially, in the first half of 2025, entities such as law enforcement agencies, non-profit organizations, school corporations, and universities will be permitted to sell cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH).
The primary objective of this action is to enable these institutions to liquidate their asset holdings by granting them access to virtual asset exchanges.
Subsequently, a pilot program is planned for the latter half of 2025. This program will allow approximately 3,500 listed companies and corporations, as well as professional investors registered under South Korea’s Capital Market Act, to purchase and sell digital currencies. The anticipated outcome is the introduction of a new stratum of professional investment into the crypto market, which has the potential to further stabilize and expand.
The ban’s lifting is concurrent with the enactment and enforcement of South Korea’s Virtual Asset User Protection Act, which provides substantial safeguards for digital asset users. This legal framework is a component of a more comprehensive initiative to guarantee that the market is subject to rigorous regulation, thereby mitigating the risks associated with virtual asset trading.
There is a discernible trend toward the acceptance and integration of cryptocurrencies into conventional finance on a global scale.
The FSC recognizes this change, recognizing that the demand for blockchain-related investments and services requires a modification in local market dynamics.
The FSC intends to establish a task force that will include a variety of stakeholders, including the Korea Federation of Banks, the Financial Supervisory Service, and the Digital Asset eXchange Alliance (DAXA), in order to facilitate the transition. The objective of this collaboration is to establish a comprehensive regulatory framework that encompasses internal control standards for corporate crypto trading.
It is also essential to involve market participants, such as crypto exchanges and industry experts, in the development of guidelines that are both practical and effective.
The strategy appears to be both progressive and cautious, with the objective of maintaining a balance between investor protection and innovation in the dynamic realm of virtual assets.
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