- South Korea’s FSC lifts a seven-year ban on institutional crypto investments.
- Initial phase permits law enforcement and educational institutions to sell crypto.
- Analysts predict that most of 2025 will be characterized by increased liquidity and significant price movements.
For years, South Korea’s Financial Services Commission (FSC), the country’s primary financial regulator, imposed strict restrictions on corporations and banks regarding virtual asset trading.
This ban, enacted in 2017, aimed to restrain “overheated speculation” amid concerns over market volatility and money laundering. However, after a lengthy seven-year halt, the stance is shifting.
On Thursday, February 13th, the South Korea’s government announced a significant policy change. They announced that they will start allowing corporate institutions to engage in the cryptocurrency market once again.
While responding to the growing global interest in the sector. The FSC has unveiled the results of a month-long consultation and provided the “Roadmap for Corporate Participation in the Virtual Asset Market.” This outlines a long process of 2025 to lift the ban on institutional trading of cryptos.
Moreover, the initiative seeks to facilitate the gradual integration of corporate entities into the crypto market while prioritizing user safety and financial stability.
The FSC confirmed a phased method to institutional adoption, ensuring that financial stability and investor safeguards remain at the forefront.
This strategic move positions South Korea alongside global markets that are already welcoming institutional crypto trading. Keep reading to know more.
South Korea Rolls Out Phased Crypto Access After 7-Year Ban
South Korea’s financial regulator has officially lifted the seven-year ban on institutional investors. This likely comes as a response to the increasing global demand for crypto investment products.
Under the new regulations, South Korea will allow companies listed on the local stock exchange to trade digital assets, including popular cryptocurrencies.
The FSC has outlined a step-by-step roadmap in its press release to facilitate business’s access to crypto markets.
As per their roadmap, in 2025’s initial phase, law enforcement agencies, non-profits, and educational organizations will be permitted to sell cryptocurrencies like Bitcoin and Ethereum.
This framework aims to provide institutions with access to crypto assets while ensuring regulatory oversight.
Under this development, the Law enforcement agencies will be the first to utilize this system, particularly when selling confiscated cryptocurrency assets.
Also, the National Tax Service and the Korea Customs Service will also be involved. Which will be creating a structured approach to managing various crypto-related law enforcement matters.
Moreover, in the second quarter of this year, universities and charitable organizations will receive approval to convert their crypto donations into standard currency.
For that to rollout smoothly, the government has established internal control guidelines to ensure efficient management of cryptos within these institutions. Which by introducing a systematic method for handling crypto-based donations.
Looking ahead, South Korea also plans to launch a pilot program for institutional investors in the other half of 2025.
Where, in H2 of 2025, the selected corporations will be able to open real-name trading accounts for investment purposes. The FSC has partnered with over 3,500 authorized companies to facilitate this transition.
Also, the authorities will prioritize established businesses with experience in high-risk financial products.
Meanwhile, firms that the Capital Market Act governs are seen as competent risk managers, that could help mitigate financial market fluxes while nurturing responsible crypto usage.
Notably, this initiative does not include financial institutions, as regulators believe that involving banks could endanger the stability of the entire banking sector.
Authorities intend to monitor developments closely before considering any future expansions of the program.
Analysts Views on South Korea’s Regulator Changed Stance
Furthermore, analysts like Ashcryptoreal have expressed optimism about the recent developments in the cryptocurrency sector, witnessed by the lifting of the ban from South Korea.
SInce it is evident that the current $3.17 Trillion crypto market is poised to experience increased liquidity and trading volume.
This surge could potentially drive prices higher for many altcoins as well as top cryptocurrencies.
Moreover, few months ago, in a previous statement on X, the CEO of CryptoQuant pointed out that South Korea is the second-largest crypto market globally, with an impressive 93% of trades occurring in altcoins and only 4% in Bitcoin.
Through this observation, Ju hinted at the impending lift of the ban, suggesting that we are entering an “altseason.”
Now that the ban has been lifted, Ashcryptoreal believes that the volume of market participation in 2025 will be substantial. Which could be paving the way for significant price movements across the board.
Disclaimer
In this article, the views, and opinions stated by the author, or any people named are for informational purposes only, and they don’t establish the investment, financial, or any other advice. Trading or investing in cryptocurrency assets comes with a risk of financial loss.
