The Financial Services Commission of South Korea announced plans for a phased lifting of the ban on corporate cryptocurrency trading.
Phased Plan by South Korean Authorities
On February 13, the Financial Services Commission of South Korea released a press statement outlining a phased approach to lifting the ban that prohibited institutions from virtual asset trading. In phase one, law enforcement agencies, non-profit organizations, school corporations, and universities will be permitted to sell cryptocurrencies like Bitcoin and Ethereum. The second half of the year will introduce a pilot program that allows around 3,500 registered corporations to buy and sell cryptocurrencies.
History of the Ban and Its Reasons
The ban on crypto trading for corporations and professional entities has been in place since 2017, introduced to combat speculation, money laundering, and market manipulation. The enactment of the Virtual Asset User Protection Act has provided significant user protections.
Planned Changes and Prospects
Amid a global trend toward allowing corporations to enter the digital asset market, demand for blockchain-related investments and services continues to rise. The Financial Services Commission plans to form a task force to establish a regulatory framework and internal control standards, in collaboration with the Financial Supervisory Service, Korea Federation of Banks, and Digital Asset Exchange Alliance. Collaboration with market participants, such as exchanges and industry experts, is crucial for setting a route to market entry for corporations in the virtual asset domain.
South Korea is moving towards a more open and regulated integration of institutional capital into the digital asset market, following global trends.
