Market
South Korea Eases Crypto Rules, Opens Doors for Corporations
South Korea is reportedly planning to gradually lift its ban on corporate investment in virtual assets starting this year.
Yonhap News disclosed the developments on January 8, citing the country’s financial regulator, the Financial Services Commission (FSC).
Institutional Crypto Investment Coming to South Korea
The FSC has reportedly outlined a strategy to open up the virtual asset space to institutional investors. The move is expected to create a more regulated and stable environment for crypto investors, both retail and institutional, in the country.
Currently, South Korean regulations restrict the issuance of real-name accounts to corporations. The restriction was despite the absence of any legal barrier to granting such accounts.
Real-name accounts are essential for virtual asset investments. However, regulators guided banks not to issue these accounts to corporations, limiting institutional participation in the market.
Hence, regulators have only permitted retail investors to invest in crypto markets so far.
According to Yonhap, the FSC announced on January 8 that it would review a plan to gradually allow corporations to open real-name accounts on exchanges. This will begin with non-profit corporations before expanding further.
The latest move from South Korea follows the implementation of the ‘Virtual Asset User Protection Act’ in 2024. The Act aimed to protect individual crypto investors and improve the overall stability of the market.
Now, the FSC is apparently promoting a second phase of virtual asset regulations. This includes addressing issues like stablecoins, listing standards, and rules of conduct for virtual asset exchanges.
“We need to discuss how to create listing standards, what to do with stable coins, and how to create rules of conduct for virtual asset exchanges. We will work to align with global regulations in the virtual asset market,” FSC director Kwon Dae-young said.
This latest development follows the recent revelation that more than 30% of South Korea’s population is investing in crypto. The data showed that as of late November, the number of domestic digital asset investors reached 15.59 million, an increase of 610,000 compared to late October.
In another positive development, the country postponed a 20% tax on virtual asset income exceeding 2.5 million won in December. Thus, South Korea appears to be positioning itself at the top of the global crypto market with favorable regulations.
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