South Korea Unveils Roadmap for Corporate Participation in the Virtual Asset Market

On Feb. 13, the Financial Services Commission (FSC) convened its third Virtual Asset Committee meeting, marking a significant shift in the country's approach to virtual assets.

South Korea is gradually opening up its virtual asset market to corporate participation, starting with universities and public interest corporations in April. These non-profit entities will be able to issue corporate real-name accounts for sales transactions, enabling them to monetize donated virtual assets.

Around 3,500 listed companies and professional investors will also be permitted to trade Bitcoin and other virtual assets in the second half of the year. This pilot program will focus on real-name trading for investment and financial purposes, targeting registered corporations recognized as professional investors under the Capital Markets Act, with financial investment product balances exceeding 10 billion won.

The move comes as part of a broader plan to integrate virtual assets into the mainstream financial system, following a global trend of institutionalization in the cryptocurrency market. However, the government is proceeding cautiously, aiming to strengthen regulations on money laundering and other illicit activities before fully permitting corporate virtual asset trading.

The decision to gradually open the market to corporate accounts is a significant development in South Korea, where a ban on corporate virtual asset trading has been in place since 2017. The move stems from the global growth trend of virtual assets, which has seen traditional financial institutions and large corporations increasingly participate in the cryptocurrency market.

Despite this progressive step, the government remains cautious. Full permission for corporate trading is expected to take time, as authorities plan to enhance regulations related to disclosure, deposits and withdrawals, and custody to address money laundering concerns.

The Virtual Asset User Protection Act will be supplemented with regulations on unhealthy business practices, and a disclosure system for virtual asset exchanges will be established before broader corporate participation is considered.

“The overall regulatory framework for virtual assets is not yet perfect, and there is a need to refine foreign exchange and tax systems,” said FSC Vice Chairman Kim So-young, also highlighting concerns about the potential transfer of virtual asset market risks to the financial market and maintaining a cautious stance on virtual asset spot ETFs. “The stance of carefully reviewing virtual asset spot ETFs remains similar,” he noted.

In the market, the government's move is seen as a significant first step towards allowing corporate virtual asset trading accounts. However, there is criticism regarding the limited effectiveness of the current measures.

“If the government genuinely intended to revitalize the market, it should have approved spot ETFs first,” remarked a virtual asset exchange official. The planned taxation on virtual assets, initially scheduled for this year, has been postponed to 2027, further influencing market dynamics and regulatory approaches.