South Korea’s financial authority has announced it will issue clear and comprehensive guidelines for intuitional crypto investment in the coming months. This move follows the Korean government’s efforts to speed up its regulatory shift toward the digital asset industry.
South Korea’s Watchdog Preparing Crypto Guidelines
On Wednesday, the Financial Services Commission (FSC) met with members and experts of the South Korean digital asset industry to debate the upcoming regulatory framework for institutional crypto investment.
The FSC’s Vice Chairman Kim So-young stated that the Korean government is “speeding up efforts” to develop its crypto market while protecting users. He also highlighted the US’ new administration, under President Donald Trump, has accelerated the global discussion about the institutionalization of virtual assets.
Previously, Jeong Eun-bo, chairman of the South Korea Stock Exchange, has called for the institutionalization of crypto in the country, noting that the Korean market needs to be revitalized to compete with other nations and prevent falling behind international markets.
The Wednesday meeting follows the FSC Virtual Asset Committee’s announcement of a roadmap for corporate participation in the crypto market. As reported by Bitcoinist, the committee reached a consensus in February to allow institutional investment in the digital asset market.
According to the roadmap, non-profit organizations, including charities and universities, can open bank accounts to access the digital asset market starting in Q2 2025. Meanwhile, companies and professional investors will gain access to the market in Q3 if they comply with the upcoming FSC guidelines.
For context, real-name accounts are required for virtual asset investments in South Korea. Only the accounts that have completed this verification under the Specified Financial Transaction Information Act can invest in digital assets. However, financial authorities have limited institutional crypto trading by guiding banks not to issue these accounts to corporations despite the absence of legal barriers or official bans.
During the meeting, Vice Chair Kim revealed they will issue detailed guidelines for non-profit corporations and crypto exchanges in April, while the rules for listed companies and professional investors will be released in the third quarter.
Institutional Adoption Needs More Than ‘Just Laws’
The FSC Vice Chair affirmed that creating the “best practices” for a healthy market, including trading, disclosure, and reporting, is required. He also noted that institutional participation is “about changing practices, not just laws.”
Kim suggested nonprofit entities establish “minimum internal control standards” to accept digital assets and disclose professional investors and the trading process.
Additionally, he urged banks and crypto exchanges to take meticulous anti-money laundering (AML) measures to reflect international AML standards, asking the Digital Assets Exchange Association (DAXA) to establish a “seamless computer system in response to the expansion of the virtual asset market.”
It’s worth noting that the Korean government reportedly began preparing the second phase of the Virtual Asset User Protection Act, which includes regulation on the distribution of digital assets and stablecoins, to continue its efforts to align with global standards.
The financial watchdog created the Virtual Asset Committee advisory group last year to discuss digital asset policies, signaling an apparent shift from its strict regulatory approach to the crypto industry. This shift included reviewing the lift on spot crypto-based exchange-traded funds (ETFs), which saw a successful first year in the US.
Bitcoin (BTC) trades at $82,585 in the one-week chart. Source: BTCUSDT on TradingView
