South Korea Reportedly Ends Nine-Year Corporate Crypto Ban

South Korea’s Financial Services Commission (FSC) has reportedly finalized guidelines permitting listed companies and professional investors to trade cryptocurrencies.

The move comes after a nine-year ban on corporate crypto investment, and complements the government’s wider “2026 Economic Growth Strategy” including stablecoin legislation and spot crypto ETF approvals announced last week.

Corporate Investment Framework

As per the FSC’s news rules cited by an annual report on equity, eligible companies can invest up to 5% of their equity capital annually under the guidelines set out by its respective media. market capitalization of the Korea’s five major exchanges, which limits investment targets to the top-20 cryptocurrencies.

Once the rules are implemented, about 3,500 entities will be able to obtain market access. These include companies that are publicly listed and registered professional investment corporations.

The question is whether dollar-pegged stablecoins like Tether’s USDT qualify or not, and if so, what does it mean? Similarly, regulators will need to exchange for the use of staggered execution and limit order size limits on orders.

Market Context

It is the first regulatory green light on corporate crypto investments since 2017 under the guidelines. The institution was banned by authorities amid fears that money laundering could be illegal, citing concerns about the threat of institutional participation.

Korea’s crypto market has been shaped in different ways by the long ban on Crypto. Close to 100% of trade activity for is done by retail investors, i.e. As traders sought offshore opportunities, capital flight reached 76 trillion won ($52 billion) as capital flights were made to the tune of $. This is a stark contrast with mature markets, which s are not. In H1 2024, institutional trading accounted for more than 80% of volume at Coinbase (in addition to the coinbase-based currency) and in its own right, over 85% of volumes.

Industry participants expect the opening to accelerate momentum for a won-denominated stablecoin and domestic spot Bitcoin ETFs.

Industry Pushback

Despite welcoming the policy shift, industry participants say that the 5% ceiling is too conservative, saying “the US, Japan, Hong Kong and the EU have no similar restrictions on corporate crypto holdings.”

Critics say the restriction could stop emergence of Digital Asset Treasury companies firms such as Japan’s Metaplanet that build corporate value by strategically building Bitcoin assets.

But if global markets grow faster, one industry official told the outlet that “It’s not worth doing too much regulations just to crypto.”

Next Steps

The final rules are expected to be published by the FSC in January or February, when . In Q1 2025, the legislative introduction of implementation will be in line with the Digital Asset Basic Act, which is scheduled to follow execution timing for implementation. Year-end Corporate trading is expected to start with corporate trading.

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