South Korea to Allow Institutional Crypto Trading by Q3 2025

South Korea is on the cusp of a significant transformation in its cryptocurrency landscape. The Financial Services Commission (FSC) is poised to introduce institutional crypto investment guidelines by the third quarter of 2025. These guidelines will enable professional investors, public companies, and charities to engage in cryptocurrency trading within a regulated framework. This move is part of a broader strategy to position South Korea as a leading player in the global cryptocurrency investment arena.

The FSC's plan includes the introduction of regulations for crypto exchanges and non-profit institutions by April 2025. These regulations will allow these entities to store and sell their crypto assets, marking a significant step in South Korea's evolving approach to digital assets. The regulatory revisions aim to balance digital asset policies with global standards, enhancing the credibility of the market and attracting foreign investors.

In January 2025, the FSC initially announced its intention to ease restrictions on institutional crypto investments. This regulatory action is part of a larger initiative to align South Korea's digital asset policies with international standards. The new regulations will permit institutions, charities, and other organizations to store and trade crypto assets, thereby improving market credibility and attracting foreign investment.

South Korea's crypto trading population is one of the largest in the world. In November 2024, approximately 15.6 million individuals, nearly 30% of the nation’s population, actively traded cryptocurrencies. While retail investors have historically dominated market fluctuations, the entry of institutional investors is expected to stabilize the market by introducing large-scale, strategic investments. This trend has been observed in the past, where growing institutional involvement has led to lower volatility in crypto securities from 2018 to 2021.

To ensure the integrity of the market, domestic crypto exchanges and banks must adhere to strict anti-money laundering (AML) processes and cybersecurity measures. South Korea mandates all users of crypto exchanges to verify their identities through real-name bank accounts, complying with financial laws and preventing fraud.

The new guidelines for institutional crypto investment by Q3 2025 are expected to have a bullish impact on the market. By allowing big players like charities and exchanges to trade, the FSC is adding legitimacy and liquidity to the market. This move is anticipated to stabilize markets, increase liquidity, and attract more long-term investors, as projected by AI market analyst Grok on March 12, 2025.

South Korea's financial authorities are not limiting their efforts to institutional crypto investment rules. The FSC is also developing the second phase of its cryptocurrency regulation framework, which will address stablecoins and impose tighter regulations on crypto firms. The initial phase, established in 2024, laid the foundation for overall market regulations. The second phase, to be introduced in 2025, will provide adequate support for stablecoins and align them with financial security protocols.

There is growing speculation that South Korea may reverse its ban on spot Bitcoin exchange-traded funds (ETFs). Although this was not directly stated in the FSC’s recent release, some political figures have hinted that it might be included in forthcoming policy reforms. If implemented, this move would further solidify South Korea's position as a global leader in cryptocurrency regulation.

With the introduction of institutional investment rules for cryptocurrencies by Q3 2025, South Korea is embracing a more structured and investor-compliant digital asset landscape. These rules are expected to fuel market liquidity, boost investor confidence, and encourage the integration of cryptocurrencies into traditional financial systems. As South Korea prepares for this regulatory shift, its evolving policies are likely to set a benchmark for international crypto markets.