South Korea’s regulatory industry for cryptocurrency continues to evolve, with authorities adopting a cautious approach to corporate investments in digital assets.
On Wednesday January 15, the Financial Services Commission (FSC) hosted its second Virtual Asset Committee meeting, where it discussed the progress of new crypto investor protection laws.
While the agenda touched on various regulatory topics, the much-anticipated decision on allowing corporate accounts for cryptocurrency trading was deferred for further review.
Decision Delayed on Corporate Crypto Investments
During the meeting, the FSC emphasized its ongoing efforts to refine policies related to corporate crypto trading accounts. Although South Korea has not formally banned such accounts, banks have reportedly been discouraged from issuing them due to “regulatory uncertainties.”
Notably, this delay of corporate crypto trading accounts comes as the FSC continues to conclude its policy framework for corporate crypto accounts, which has undergone extensive scrutiny in recent months.
The issue has been a focal point of 12 subcommittee and task force discussions, according to FSC Vice Chairman Kim So-young. According to report, the FSC is expected to complete its review soon, with Vice Chairman Kim stating, “We will report the results soon and proceed with the subsequent steps promptly.”
While the community in South Korea has been eagerly awaiting clarity on corporate investments, regulators have so far refrained from prioritizing the matter, instead focusing on broader policy issues, including investor protection and regulatory oversight.
Regulatory Developments and Future Steps
Furthermore, discussions at the meeting centered around the second phase of South Korea’s crypto investor protection law, which became effective in July 2024.
While the first phase focused on safeguarding user deposits and addressing unfair trading practices, the second phase aims to close regulatory gaps related to crypto asset issuance, distribution, and disclosures.
Regulators have emphasized the importance of a comprehensive approach that considers the needs of businesses, markets, and users. Additionally, the committee plans to explore the creation of a separate regulatory framework specifically targeting stablecoin transactions and associated businesses.
This move reflects the growing prominence of stablecoins in the global financial ecosystem and the need to address their challenges and risks within South Korea’s regulatory framework. It is worth noting that the delay in addressing corporate crypto accounts has left the community waiting for a clear direction.
Meanwhile given Kim’s statement on the review to be completed soon it is likely that there could be a gradual rollout of corporate trading accounts in the near term, with the issuance of real-name accounts forming a key component of the framework.
Such a move could pave the way for increased institutional participation in South Korea’s digital currency market, which has been growing steadily despite regulatory hurdles.
Featured image created with DALL-E, Chart from TradingView
