Short Description:
South Korea ends its 9-year crypto trading ban for corporations, permitting limited access with strict caps—a cautious step toward integration.
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Main Article
South Korea is set to lift its nine-year prohibition on corporate crypto trading, marking a significant, albeit cautious, step in regulatory evolution. Under new Financial Services Commission (FSC) guidelines, listed companies and professional investment firms can re-enter the crypto market, signaling a shift from crisis-driven restriction toward structured participation. This policy pivot is part of South Korea’s broader “2026 Economic Growth Strategy,” aiming to position the country as a major digital asset hub. The move follows a 2017 ban instituted to curb retail speculation and systemic risks, which left the market dominated by individual investors while capital flowed overseas. This careful reopening is framed within upcoming comprehensive legislation, the Digital Asset Basic Act, which seeks to consolidate crypto market regulations and potentially introduce spot crypto ETFs and stablecoin frameworks.
The new framework is notably restrictive, designed to manage institutional exposure. Corporate investments will be capped at 5% of annual equity capital and limited to the top 20 cryptocurrencies by market cap traded on domestic regulated exchanges. This intentionally funnels institutional activity toward major assets like Bitcoin and Ether, sidelining more volatile altcoins. The policy reflects regulators’ ongoing concerns about volatility, operational, and reputational risks to corporate balance sheets and financial stability. Compared to the more open institutional approaches in the US, EU, and Hong Kong, South Korea’s path is defined by controlled access. The cautious design aims to gradually improve liquidity and market structure without inviting large, destabilizing capital inflows in the short term.
This calculated opening could gradually transform South Korea’s crypto landscape by introducing professional crypto market liquidity and risk management. It may spur demand for new financial products like ETFs and advanced custody services, enhancing South Korea’s competitiveness against other Asian financial hubs. However, industry voices argue the strict 5% cap may stifle innovative corporate treasury strategies, like those seen with Bitcoin-holding firms in Japan. The success of this measured integration will depend on market stability, corporate risk management, and regulatory enforcement. The final guidelines are expected in early 2026, with future adjustments possible if initial implementation proves successful.
Short Summary
South Korea is cautiously ending its corporate crypto trading ban, allowing limited institutional access under strict caps to manage risk. This marks a strategic shift toward regulated market integration, aiming to boost liquidity and align with broader digital asset reforms. While more restrictive than other major markets, the move signals a long-term commitment to balancing institutional crypto participation with financial stability, setting the stage for gradual market evolution.
