South Korea crypto rules could change as the government plans to lift the corporate crypto trading ban, paving the way for Korean crypto capital.
South Korea has undertaken a major policy shift. On February 13, 2025, the country announced that it is lifting its long-standing crypto trading ban. This decision has now made it possible for institutions, non-profits, and other corporate entities to engage in crypto transactions in the country.
This move also aligns South Korea with global crypto trends, as global institutional participation is ramping up.
“Major countries abroad are broadly allowing corporate participation in the market, and domestic companies are experiencing increasing demand for new businesses related to blockchain, indicating a changing market environment,” said the FSC in their statement on Thursday.
South Korea just opened the doors for institutional crypto adoption! The FSC has approved a phased approach to ensure financial stability & investor protection.
This move puts South Korea in step with global markets embracing institutional crypto trading.
Bullish times…
— RK Gupta (EarnWithRK) (@earnwithrk) February 14, 2025
The Logistics of Lifting the Ban on Crypto in South Korea
The Financial Services Commission (FSC), South Korea’s financial regulator, has suggested implementing the policy change in phases.
During the first half of 2025, the country will allow non-profit and school organizations to sell donated crypto holdings. The policy will then extend to listed corporations and professional investors. The corporations in the second phase will have access to regulated digital assets they can invest in.
Lifting the ban on corporate crypto trading will unlock several key benefits. The market will mature. Institutional investors are anticipated to participate, reducing volatility typically driven by retail investors. With institutional investment and demand, anticipation is that crypto will go mainstream in South Korea, and the country witness an increased adoption of digital assets.
The structured approach proposed by the FSC provides a clear legal framework ensuring legal and compliant crypto transactions. It aims to give institutional investors a safe and transparent platform and satisfy financial regulatory needs. The FSC plans to create a task force that involves related organizations, aiming to release a regulatory framework for internal control standards.
The Financial Supervisory Service, the Korea Federation of Banks, and the Digital Asser eXchange Alliance (DAXA) will help develop the crypto trading guidelines.
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Why Were the Corporations Banned from Trading Crypto?
South Korea restricted corporate trading in 2017. The government cited concerns over excessive speculation and financial stability. The government also frowned upon the potential use of digital assets for illicit activities such as money laundering.
South Korean regulators were uncomfortable with the lack of investor protection in the then largely unregulated market and were concerned about large-scale market manipulation.
Since late last year, the FSC has allowed law enforcement to liquidate crypto holdings acquired from illegal activities. The country’s first crypto regulatory framework, focused on investor protection, was implemented in July last year.
Until now, only retail traders, vetted by their official government names, were allowed to trade cryptocurrencies.
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What Does the Road Ahead Look Like For South Korea Crypto?
With the ban lifted, South Korea is signaling that it is set to embrace cryptocurrencies in a regulated setting. The FSCs move aligns with an international trend of governments and financial regulators attempting to embrace crypto without compromising investor protection and regulation.
There are risks, however. The government of South Korea will need to balance innovation and investor protection to make sure that companies do not exploit regulatory loopholes.
The success of this policy shift will hinge on whether the FSC is effective in enforcing oversight measures while creating a crypto-friendly investment climate.
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