South Korea’s Financial Services Commission (FSC) announced plans to gradually open the crypto market to corporations, marking a shift from a long-standing ban on institutional trading.

The policy, outlined during the third meeting of the Virtual Asset Committee, will allow select entities to trade digital assets under a phased approach beginning this year.

Phased approach

The FSC will 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, approximately 3,500 registered professional investment firms and publicly traded companies will be allowed to participate in crypto trading through a pilot program.

Corporate trading of digital assets has been largely restricted since 2017 due to concerns over 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.

The FSC cited increasing demand from domestic businesses for blockchain-related ventures and noted that major economies already allow institutional participation in crypto markets.

To mitigate risks, the FSC will introduce stronger anti-money laundering measures, independent custody requirements, and mandatory disclosures. Banks and exchanges will assess corporate applicants before granting accounts, ensuring compliance with financial regulations.

Tighter oversight

The committee also discussed concerns over the rapid listing of new cryptocurrencies on domestic exchanges, which has contributed to price volatility. The FSC plans to introduce stricter listing criteria and transparency measures to prevent market manipulation.

In addition to the crypto policy shift, 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 work with financial regulators, banking associations, and crypto exchanges to finalize implementation details. While this roadmap signals a major policy shift, broader corporate participation in crypto markets will depend on further regulatory evaluations and market conditions.

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