Daniel Walker
South Korea is set to relax its effective ban on institutional crypto trading, according to a report by Yonhap News Agency on Wednesday. The Financial Services Commission (FSC), the nation’s primary financial regulatory body, announced plans to permit institutional investors to open trading accounts on cryptocurrency exchanges gradually.
The FSC intends to begin by allowing non-profit organizations to participate first, in collaboration with the Digital Asset Committee, a policy advisory group under its jurisdiction.
Under South Korea’s financial information regulations, only retail investors who have verified their identities using their government-issued names are permitted to trade cryptocurrencies. Although there is no explicit ban on institutional trading, the FSC has historically advised banks against enabling institutions to create accounts on crypto exchanges. This policy shift aligns with efforts to encourage growth in the local cryptocurrency sector.
Presidential Commitment to Boost the Crypto Industry
Easing these restrictions fulfills a campaign promise made by President Yoon Suk-yeol, who aims to stimulate the domestic cryptocurrency market. Yoon and the ruling People Power Party have also advocated for introducing spot cryptocurrency exchange-traded funds (ETFs) to the local market, which are currently unavailable in South Korea.
The FSC is also working on a regulatory framework to follow the Virtual Asset Investor Protection Act, implemented in July of last year. The next phase of this legislation is expected to establish guidelines for stablecoins, crypto exchanges, and token listing processes. Additionally, the FSC plans to amend the Financial Information Act to include a screening mechanism for major stakeholders in virtual asset service providers.
