South Korea’s regulatory landscape for cryptocurrencies is undergoing a transformation as the government has announced plans to lift the long-standing ban on corporate crypto trading. This change, effective from February 13, 2025, will permit institutions, non-profits, and various corporate entities to engage in cryptocurrency transactions.

The move aligns South Korea with the increasing global trend of institutional participation in digital currencies. The Financial Services Commission (FSC) stated, “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 shifting market environment.

The Logistics of Lifting the Ban on Crypto in South Korea

The FSC proposes a phased implementation of this policy, beginning with non-profits and educational organizations being allowed to sell donated cryptocurrency. The policy will eventually extend to listed corporations and professional investors, providing access to regulated digital assets.

With this lift, several advantages are anticipated: the crypto market in South Korea will mature as institutional investors enter, reducing volatility that often accompanies retail trading. This structured framework aims to facilitate secure and compliant crypto transactions, ensuring that financial regulatory requirements are met.

Why Were Corporations Previously Banned from Trading Crypto?

Corporate trading was restricted back in 2017, mainly due to concerns about excessive speculation and the potential for illegal activity, such as money laundering. The authorities were worried about inadequate investor protection in an unregulated market and the risk of large-scale market manipulation.

Since last year, the FSC has allowed enforcement agencies to liquidate cryptocurrencies that were obtained through illicit activities, marking the introduction of South Korea’s first crypto regulatory framework aimed at investor protection.

The Future of Crypto in South Korea

With these new regulations, South Korea signals a readiness to embrace cryptocurrencies within a structured framework. However, balancing innovation with investor protection will be crucial to preventing companies from exploiting potential regulatory gaps. The efficacy of these new regulations will depend on the FSC’s capacity to monitor and enforce oversight measures while fostering a welcoming environment for investment in digital assets.

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For more details, see: South Korea In A Sink Or Swim Situation, Must Approve Crypto ETFs Or Fall Behind