South Korea to Lift Ban on Corporate Crypto Trading

The Financial Services Commission (FSC) of South Korea has announced plans to gradually allow corporations to engage in crypto trading, marking a significant shift in the country’s regulatory stance. This move comes after years of restrictions on institutional participation in the virtual assets trading market.

Phased Lift on Ban

In the first phase, authorities will permit law enforcement agencies, non-profit organizations, school corporations, and universities to sell cryptocurrencies such as Bitcoin and Ethereum for cashing out purposes. These entities will be allowed to access services on virtual asset exchanges in the first half of the year.

In the second phase, a pilot program will be rolled out for buying and selling crypto for approximately 3,500 listed companies and corporations. This program is expected to go live in the second half of the year and will enable digital asset trading for professional investors registered under the country’s Capital Market Act.

Background and Motivation

The ban on crypto trading for corporations and other professional entities has been in place since 2017, when the government introduced restrictions to address concerns around speculation, money laundering, and market manipulation.

According to the FSC, the enactment and enforcement of the Virtual Asset User Protection Act have established key protections for users, paving the way for the lifting of the ban.

Global Trend and Market Demand

The FSC also noted that the global trend of allowing corporations to participate in the digital asset market has created demand for blockchain-related investment and services. As a result, the local market must adapt to meet this demand.

Regulatory Framework and Collaboration

The FSC plans to form a task force involving related organizations to develop a regulatory framework for internal control standards. The Financial Supervisory Service, the Korea Federation of Banks, and the Digital Asset eXchange Alliance (DAXA) will contribute to formulating crypto trading guidelines.

Collaboration with market participants, such as exchanges and industry experts, is also crucial to the roadmap targeting corporate entry into the virtual asset market.

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