• South Korea has lifted a seven-year ban on institutional crypto investment, allowing stock-listed firms to trade virtual assets.
  • The policy change will roll out gradually, starting in 2025, with regulations ensuring stability, transparency, and investor confidence.

South Korea has officially lifted its seven-year ban on institutional cryptocurrency investment, marking a major shift in the country’s approach to digital assets. The Financial Services Commission (FSC), the chief financial regulator, made the announcement following increasing global demand for regulated crypto investment opportunities.

The decision, which comes after years of cautious restrictions, will now allow companies listed on South Korea’s stock exchange to trade virtual assets, including cryptocurrencies. The rollout will begin on a pilot basis in the second half of this year, creating a structured path for institutional participation.

In December 2017, the FSC initially imposed the ban, citing market volatility and price instability. Although the prohibition was not an outright legal restriction, regulators strongly advised banks against allowing institutional entities to open trading accounts on cryptocurrency exchanges.

South Korea Plans Gradual 2025 Kick-off

The shift will not happen overnight. South Korea plans to implement the policy change in multiple stages to ensure stability and compliance. During the initial phase, non-profit organizations and schools will be permitted to sell donated cryptocurrency holdings starting in the first half of 2025.

As the policy expands, listed corporations and professional investors will gain access to regulated digital assets. The introduction of corporate crypto trading is expected to mature the market, as institutional investors typically bring stability compared to retail traders, who often drive market volatility.

The FSC has outlined a structured plan to introduce regulations gradually. The commission will collaborate with the Digital Asset Committee to establish guidelines for listing standards and stablecoin regulations and conduct rules for virtual asset exchanges. 

“We need to discuss how to create listing standards, what to do with stablecoins, and how to create rules of conduct for virtual asset exchanges,” said FSC Secretary-General Kwon Dae-young.

Korea to Screen Owners, Guide Trading

The FSC is also considering amending the Financial Information Act to strengthen investor confidence. This revision would introduce a screening process for major shareholders of virtual asset service providers, ensuring more transparent ownership structures and reducing risks related to unregulated crypto investments.

A key part of the plan is the creation of a regulatory framework for internal control standards. The Financial Supervisory Service, the Korea Federation of Banks, and the Digital Asset eXchange Alliance (DAXA) will collaborate to develop these crypto trading guidelines.

With institutional investors entering the market, the South Korean crypto industry is expected to become more structured and widely adopted. This move aligns with global trends where governments are working to integrate digital assets into traditional financial markets while maintaining regulatory oversight.

The ultimate success of this policy shift will depend on how well the FSC enforces oversight measures while simultaneously creating a crypto-friendly investment climate. If executed effectively, South Korea could emerge as a leader in regulated digital asset markets, setting a precedent for other nations looking to bridge the gap between traditional finance and cryptocurrencies.