South Korea is officially reopening its doors to corporate cryptocurrency investment, ending a nine-year prohibition that left the market almost entirely reliant on retail traders.
The Financial Services Commission (FSC) finalized guidelines on Jan. 10 that will allow listed companies and registered financial institutions to hold digital assets, subject to strict caps and asset restrictions. The decision overturns a 2017 ban originally instituted to curb speculation and money laundering.
Key Restrictions:
The FSC has adopted a conservative approach to re-entry.
- Investment Cap: Corporations are limited to investing no more than 5% of their annual equity capital in digital assets.
- Eligible Assets: Investments are restricted to the top 20 cryptocurrencies by market capitalization.
- Venue Requirement: Trades must be executed solely on South Korea’s five fully licensed exchanges: Upbit, Bithumb, Coinone, Korbit, and Gopax.
Local internet giant Naver, with approximately 27 trillion won ($18.4 billion) in equity, could theoretically purchase up to 10,000 BTC under the new cap, though analysts expect firms to move cautiously.
While the move is seen as a pivotal step for the “Kimchi Premium” market, critics argue the regulations are too tight compared to global peers.
“A 5% cap prevents South Korean firms from adopting full treasury strategies seen in companies like MicroStrategy or Metaplanet,” said an analyst at Presto Research.“However, it is a necessary first step to institutionalize our local market.”