Korean companies open the door to cryptocurrency investment: 9-year ban finally coming to an end

The nine-year-long corporate cryptocurrency investment restriction policy has ushered in a major turning point. According to Seoul Economic Daily, the Financial Services Commission (FSC) of South Korea is drafting regulatory guidelines for cryptocurrency trading targeting listed companies and professional investors, symbolizing a strategic shift from a complete ban to a regulated licensing approach. The FSC has preliminarily completed a draft of the relevant guidelines, with the final version expected to be officially released around January or February 2025. If progress proceeds as planned, South Korean enterprises are expected to qualify for legal cryptocurrency asset investments within 2025.

From Total Ban to Ordered Opening: South Korea’s Regulatory Policy Strategic Shift

This new guideline continues the recent steps taken by the FSC to gradually lift the practical ban on “institutions trading crypto assets.” As early as mid-2025, South Korea approved non-profit organizations and cryptocurrency exchanges to sell their held crypto assets; by the second half of the year, regulators further announced that they would open cryptocurrency trading rights to listed companies and professional investors. These measures indicate that South Korea is building a new order moving from a complete prohibition toward institutionalization and regulation.

The new policy also reflects regulators’ efforts to balance two demands: allowing institutions to participate in crypto asset allocation to seize market opportunities, while preventing financial risks from excessive speculation.

Investment Cap at 5%, Focus on Top 20 Coins: Specific Rules for Corporate Entry

To ensure that corporate investments in cryptocurrencies do not turn into speculative tools, the FSC has set up multiple protective mechanisms in the draft:

Investment Limit: Corporations and professional investors can allocate a maximum of 5% of their shareholder equity capital (i.e., funds from shareholders) annually for purchasing cryptocurrencies. This strict ratio reflects regulators’ cautious attitude.

Asset Scope Restriction: Currently, only the top 20 cryptocurrencies by market capitalization are permitted for purchase. Based on current market conditions, Bitcoin (BTC) and Ethereum (ETH), as the two largest projects by market cap, with circulating market values of $179.984 billion and $36.553 billion respectively, will be the main targets for corporate funds.

Stablecoin Controversy Pending: Whether USD-pegged stablecoins like USDT and USDC will be included in the legal purchase list is still under discussion. This unresolved issue may influence actual asset allocation choices for enterprises.

Stablecoins and Market Liquidity: Key Concerns of the New Policy

Presto Research Associate Min Jung pointed out that this policy will inject significant new liquidity into the crypto market. However, since the investment scope is limited to the top 20 coins by market cap, funds are expected to be highly concentrated in Bitcoin and Ethereum, with limited policy benefits for other competing tokens.

Although the 5% investment cap appears conservative, Min Jung believes it does not constitute a substantial obstacle for companies taking their first steps in reform. She noted that most early-stage companies will adopt a gradual approach rather than investing the full amount immediately, so this restriction is unlikely to be a major barrier in the short term.

The Digital Asset Basic Act Approaching: Finalization of the Regulatory Framework

The most anticipated development among South Korea’s crypto industry and investment communities is the expected release of the Digital Asset Basic Act in the first quarter of 2025. This heavyweight legislation, regarded as the “second phase comprehensive regulatory bill,” will set the broad direction for key policies affecting industry development, including the issuance and trading regulations of crypto spot ETFs and the establishment of a regulatory framework for the Korean won stablecoins.

Additionally, the new guidelines incorporate mechanisms such as “order splitting trading” and “price limits” to prevent market volatility caused by large transactions. These layered safety measures demonstrate South Korea’s emphasis on market risk management during the opening process.