South Korea's Financial Authority to Issue Clear Guidelines for Institutional Crypto Investment

This move follows the Korean government's efforts to speed up its regulatory shift toward the digital asset industry.

South Korea’s financial regulator, the Financial Services Commission (FSC), is planning to issue clear and comprehensive guidelines for intuitional cryptocurrency investment in the coming months. The move comes amid the Korean government’s broader efforts to speed up its regulatory shift toward the digital asset industry.

On Wednesday, the FSC met with members and experts of the South Korean digital asset industry to discuss the upcoming regulatory framework for institutional investors.

During the meeting, the FSC’s Vice Chairman Kim So-young said the government is "speeding up efforts" to quickly build up the country's digital asset industry while protecting users. He added that the new US administration, under President Donald Trump, has accelerated the global discussion about the institutionalization of virtual assets.

"The new U.S. administration is rapidly advancing the discussion on the institutionalization of virtual assets. As institutions participate in the virtual asset market, it’s important to create the best practices for a healthy market, including trading, disclosure and reporting. But it’s not about changing laws; it’s about changing practices," said Vice Chair Kim.

Earlier this year, Chairman Jeong Eun-bo of the Korea Stock Exchange called for the institutionalization of crypto in the country. As the chairman of the bourse, Jeong noted that the Korean market needs to be quickly revitalized to compete with other nations and prevent it from lagging behind international markets.

Wednesday’s meeting comes after the FSC Virtual Asset Committee announced a roadmap for corporate participation in the crypto market.

As previously 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 said they will be issuing 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.

"Non-profit corporations should set minimum internal control standards to accept digital assets and disclose how professional investors trade and the trading process. Banks and exchanges should also take more meticulous anti-money laundering (AML) measures to reflect international AML standards. I also ask the Digital Assets Exchange Association (DAXA) to establish a seamless computer system in response to the expansion of the virtual asset market," he added.

It is pertinent to add that the Korean government is reportedly 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 also launched 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 has also seen the regulator examining the possibility of lifting the ban on spot cryptocurrency-based exchange-traded funds (ETFs), which saw a successful first year in the US.