South Korea is set to ease its ban on corporate cryptocurrency trading, a major policy shift by the Financial Services Commission (FSC). The regulator has announced a phased approach, starting with nonprofit organizations, universities, law enforcement agencies, and crypto exchanges, which will permit the conversion of digital assets like Bitcoin and Ethereum into cash within the first half of the year.
In the second half, the policy will extend to listed corporations and registered firms classified as qualified professional investors, allowing them to engage in cryptocurrency transactions. South Korea intends to move beyond retail investors and gradually integrate digital assets into the corporate sector.
Under the new framework, listed companies and eligible corporations will be allowed to buy and sell digital assets through a pilot program in the latter half of the year. This expansion will be regulated under South Korea’s Capital Markets Act, ensuring a structured approach for professional investors. The shift follows the implementation of the Virtual Asset User Protection Act, which has introduced stronger safeguards to prevent financial misconduct, aligning South Korea with global trends in institutional crypto adoption.
Despite the policy change, financial institutions remain excluded from the pilot phase to prevent potential risks from spilling into the traditional banking sector. Instead, the FSC aims to regulate security token offerings through separate legislation. To qualify for corporate crypto trading, companies must meet financial investment thresholds—KRW 5 billion ($3.5 million) if externally audited or KRW 10 billion ($7 million) otherwise.Â
To oversee corporate participation, the FSC has formed a task force that includes the Digital Asset Exchange Alliance (DAXA), the Korea Federation of Banks (KFB), and the Financial Supervisory Service (FSS). Banks and cryptocurrency exchanges will evaluate eligible companies, while new guidelines will be introduced to strengthen investor protection. To maintain market stability, professional investors will be advised to use third-party custodians and follow stricter disclosure requirements.
Industry experts have welcomed the move, anticipating that increased corporate participation will boost liquidity and reduce volatility in South Korea’s crypto market. They also expect this expansion to help narrow the “kimchi premium,” a term referring to the inflated price of cryptocurrencies in the country compared to global markets. With Bitcoin likely to dominate corporate investments initially, analysts predict domestic firms will follow global trends by adding digital assets to their portfolios for diversification and shareholder value enhancement.
South Korea’s crypto exchange market remains highly concentrated, with Upbit controlling 70%-80% of the market and Bithumb as its only major rival. Together, they account for approximately 97% of trading activity.Â
In preparation for corporate onboarding, both exchanges are restructuring their banking partnerships—Bithumb is reportedly shifting to Kookmin Bank, while Upbit may transition from KBank to Hana Bank. This shift reflects broader industry adjustments as corporate interest in digital assets grows, following global trends set by companies like MicroStrategy, Tesla, and Japan’s Metaplanet in increasing Bitcoin holdings.
