South Korea Ends Nine-Year Corporate Crypto Ban

South Korea has ended a nine-year ban on corporate crypto investments. The Financial Services Commission (FSC) finalized guidelines allowing listed companies and professional investors to trade top-20 cryptocurrencies by market capitalization. The move aligns with the government's 2026 Economic Growth Strategy, which includes stablecoin legislation and spot crypto ETF approvals.

Under the new rules, eligible corporations can invest up to 5% of their equity capital annually. The investments are limited to the top-20 cryptocurrencies listed on Korea's five major exchanges. This change affects approximately 3,500 entities, including publicly listed firms and registered investment corporations.

The FSC will require exchanges to implement staggered execution and order size limits to ensure market stability. The details of whether dollar-pegged stablecoins like USDT will qualify for investment remain under review.

Why Did This Happen?

The nine-year prohibition on corporate crypto investment was lifted due to the growing demand for institutional participation in digital assets. Authorities had banned corporate investment over concerns about money laundering and financial stability. The new rules reflect a shift in policy as South Korea aims to catch up with global markets like the U.S. and Japan, which have more relaxed crypto investment regulations.

The prolonged ban shaped Korea's crypto market in distinct ways. Retail investors dominate trading activity, while institutional participation has been minimal. Capital flight reached 76 trillion won ($52 billion) as traders sought opportunities offshore. The contrast with markets like Coinbase, where institutional trading accounts for over 80% of volume, highlights the need for regulatory changes in South Korea.

What Are Analysts Watching Next?

Industry participants argue the 5% cap is excessively conservative. Critics point out that the U.S., Japan, Hong Kong, and the EU impose no comparable limits on corporate crypto holdings. The cap could prevent the emergence of Digital Asset Treasury companies like Japan's Metaplanet, which build corporate value through strategic Bitcoin accumulation.

The FSC plans to release final guidelines within January or February 2026. Implementation will align with the Digital Asset Basic Act, scheduled for legislative introduction in Q1 2025. Corporate trading is expected to commence by year-end. The act will establish a legal framework for stablecoin regulation, licensing, and market abuse controls.

The government is also considering moving 25% of its treasury funds into digital currencies by 2030. This initiative will position South Korea as a global leader in digital asset adoption. The first phase of this plan includes launching a deposit token backed by commercial bank deposits, with a pilot program starting in H1 2026.

South Korea's regulatory moves are expected to attract institutional investors and foster a more stable crypto market. The country's approach to digital assets is gaining attention from global investors and regulators as it seeks to balance innovation with financial stability.