South Korea to Lift 9-Year Ban on Corporate Crypto Investments
South Korean regulators plan to lift a nine-year ban on corporate investments in cryptocurrencies as the country continues to take interest in the digital asset space. This move is expected to have a significant impact on the industry, allowing listed companies and professional investors to diversify their portfolios.
New Guidelines and Investment Limits
According to a report in the Seoul Economic Daily, the Financial Services Commission (FSC) has drafted new guidelines for listed companies and professional investors, which are expected to be finalized by February. These guidelines will allow eligible companies to invest up to 5% of their equity in the top 20 cryptocurrencies by market capitalization listed on Korea’s five major exchanges.
The investment limit is seen as a cautious approach, with some advocates fearing that it may be too high and could put South Korea at a disadvantage compared to countries such as the United States, Japan, and the European Union, which have no limits on corporate crypto holdings. An industry insider noted that “investment limits that do not exist abroad could weaken the inflow of funds and prevent the emergence of specialized virtual currency investment companies.”
Regulatory Shift and Industry Reaction
South Korea banned corporate crypto investments and initial coin offerings in 2017, citing concerns over financial stability and describing crypto investments as “unproductive speculative” activity. However, under the current crypto-friendly government led by President Lee Jae-myung, regulators have begun to integrate digital assets back into the financial system.
Last year, South Korea began allowing nonprofits and crypto exchanges to liquidate crypto holdings for financial management purposes. The latest move to lift the ban on corporate crypto investments is seen as a positive development for the industry, with many welcoming the shift towards greater regulatory clarity.
However, there are still delays in crypto-related rulemaking, including the Basic Law on Digital Assets, which has been postponed until 2026. Regulators are currently discussing whether oversight of stablecoin reserves should be given to the FSC or the Bank of Korea and which institutions will be allowed to authorize the issuance of won-pegged stablecoins under the upcoming regulatory framework.
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