South Korea's Financial Services Commission (FSC) has now established guidelines that allow listed companies and professional investors to trade in cryptocurrencies.
This decision ends a nine-year ban on corporate cryptocurrency investments and fits into the government's broader '2026 Economic Growth Strategy,' which also includes laws on stablecoins and approvals for spot-based ETFs for crypto, announced last week.
Corporate Investment Framework
According to the FSC's new guidelines, as reported by local media, qualified companies may invest up to 5% of their own capital annually. This investment applies only to the twenty largest cryptocurrencies by market value on the five largest exchanges in Korea.
Approximately 3,500 businesses are expected to be able to trade once the rules come into effect. This includes listed companies and registered professional investment funds.
There is still ongoing discussion about whether stablecoins pegged to the USD, such as Tether's USDT, should be included. Regulators also require exchanges to implement order size limits and staggered execution.
Market context
The guidelines mark the first time since 2017 that companies have received clear permission for cryptocurrency investment. Authorities banned institutional participation at that time due to concerns over money laundering.
The prolonged ban has affected Korea's cryptocurrency market in several ways. Private investors account for nearly 100% of trading activity. Capital flight reached 76 trillion won (52 billion USD) as traders sought opportunities overseas. The difference compared to mature markets is clear. On Coinbase, institutional trading accounted for over 80% of volume during the first half of 2024.
The industry believes the new decision will increase opportunities for a won-denominated stablecoin and domestic spot-based Bitcoin ETFs.
Industry opposition
The industry is positive but believes the 5% cap is too low. The US, Japan, Hong Kong, and the EU have no such restrictions on corporate cryptocurrency holdings.
Critics say the restriction could hinder digital asset firms, such as Metaplanet in Japan, from growing through strategic Bitcoin accumulation.
"Simply having strict rules on crypto could cause Korea to fall behind as global markets move faster," says an industry representative to the newspaper.
Next steps
FSC plans to publish final guidelines in January or February. Implementation will coincide with the Digital Asset Basic Act being incorporated into legislation in the first quarter of 2025. Corporate trading in crypto is expected to begin before the end of the year.
