Corporate crypto access returns to South Korea, though investment caps raise competitiveness concerns.
South Korea is moving to bring corporations back into the cryptocurrency market after years of strict limits. Regulators have finalized new rules that would permit limited institutional participation while maintaining strict controls. Analysts believe the move signals a policy shift as digital assets become part of the country’s longer-term economic planning.
FSC Clears Path for Corporate Crypto Trading With Strict Investment Caps
South Korean regulators are set to reopen corporate access to cryptocurrency trading under new rules issued by the Financial Services Commission (FSC). The move ends a ban introduced in 2017, when authorities removed institutions from the market. Officials cited concerns over money laundering, capital flight, and excessive speculation.
Since the ban, retail traders have dominated South Korea’s crypto market, accounting for nearly all trading activity.
Regulators are now taking a cautious approach to the market’s reopening. Only listed companies and licensed professional investors will be allowed to participate, with strict limits placed on both investment size and eligible assets.
Local media reports say the FSC designed the rules to curb speculative behavior while allowing institutions to return under close supervision.
Under the framework, eligible corporations will face several core limits:
- Annual crypto investment capped at 5% of equity capital.
- Assets are restricted to the top 20 cryptocurrencies by market value.
- Only tokens listed on Korea’s five major exchanges are permitted.
- Trades are subject to staggered execution and order size limits.
Roughly 3,500 entities, including public companies and registered investment firms, are expected to qualify once the rules take effect. Regulators are still reviewing whether dollar-based stablecoins such as Tether’s USDT will be allowed.
Retail Dominance May Ease as South Korea Allows Institutional Trading
Exchanges will also be required to adjust their systems to support phased execution to reduce market impact. The guidelines mark the first formal approval for corporate crypto investment since the original ban.
That restriction left South Korea with one of the most retail-heavy crypto markets globally. More than 10 million domestic investors participated in crypto trading during the first half of last year. At the same time, an estimated 76 trillion won flowed out of the country.
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Nearly all market activity came from individuals, driving strong demand for higher-risk altcoins. As a result, alternative tokens account for about twice the share of market capitalization seen in overseas markets.
Industry participants expect institutional access to bring structural changes. Some point to possible momentum for a won-based stablecoin and renewed discussion around domestic spot Bitcoin exchange-traded funds, an area where South Korea has lagged global peers.
Strict Limits Could Hold Back Corporate Crypto Demand in South Korea
Even with the ban lifted, market observers argue that limits on corporate investment could prevent capital from returning at scale. Major markets such as the United States, the European Union, Hong Kong, and Japan allow companies to trade crypto without fixed caps.
In Japan, firms like Metaplanet have adopted digital asset treasury strategies that include holding Bitcoin. Legal experts have also raised concerns. Park Sang-jin, a senior foreign attorney at SL Partners, noted that Korean law does not usually restrict asset classes for general companies outside regulated sectors.
Critics argue that the 5% equity limit reduces flexibility for companies and restricts long-term crypto strategies that could add to corporate value. As South Korea moves closer to reopening the market, debate continues over how to balance risk controls with global competitiveness.