Korean-listed companies' crypto investments are unblocked, with thousands of major investors ready to act

South Korea’s cryptocurrency market faces its most significant policy shift in a decade. On January 14, the KOSPI index broke through 4,700 points intraday for the first time in history, reaching a new high. Amid this stock market surge, the country’s Financial Services Commission (FSC) quietly began shaping a new landscape for the crypto market—proposing to lift the ban on corporate crypto investments that has been in place since 2017. This policy adjustment will allow listed companies and professional investors to participate legally in cryptocurrency trading, breaking a nine-year “institutional isolation” and potentially bringing in hundreds of billions of dollars in capital.

The Nine-Year Ban Finally Lifted, Listed Companies Will Get the Green Light to Invest

In 2017, Bitcoin experienced explosive growth in South Korea, highlighting the “Kimchi premium,” with retail investors’ speculative enthusiasm running high, ICO chaos, and regulatory concerns mounting. Coupled with anti-money laundering and financial crime prevention considerations, Korean authorities swiftly implemented measures, including banning corporate entities from participating in crypto trading. This ban has persisted for nearly ten years.

According to South Korean media reports, the FSC shared a draft policy guideline during a government-private sector working group meeting on January 6. The new regulation essentially refines the “Promotion of Virtual Asset Market Plan” from February last year. The FSC plans to announce the final guidelines as early as January to February this year. If implemented smoothly, corporate crypto trading is expected to officially commence before the end of this year.

According to the Seoul Economic Daily, the new rules will allow qualified corporate entities to invest up to 5% of their net assets in cryptocurrencies annually. The investment scope is limited to the top 20 cryptocurrencies by market cap, focusing on liquid mainstream coins like Bitcoin and ETH. Calculated based on a 2,000 KRW unit, this 5% cap still allows substantial capital to flow into large-scale enterprises.

The ranking of investment coins will be announced biannually by DAXA, an alliance of South Korea’s five major crypto exchanges. Regarding trading execution, the new rules require exchanges to split large orders into smaller batches, set limits on single order sizes, and implement measures to reduce market impact and prevent manipulation.

Institutional Capital Surge Imminent, Shaking Up the Domestic Market Landscape

The nine-year corporate ban fundamentally changed the participation structure of South Korea’s crypto market. The market has been almost entirely retail-driven, with large institutional and corporate funds excluded from the scene, resulting in limited trading volume and activity. Many institutions and high-net-worth funds seeking digital asset allocations have turned to overseas markets for more relaxed investment channels.

Post-lifting, approximately 3,500 listed companies and enterprises registered as professional investors under the Capital Markets Act will be permitted to participate. This influx of “new forces” will significantly alter the market landscape. Industry estimates suggest that, for example, Naver, with a book value of 27 trillion KRW, could theoretically purchase about 10,000 Bitcoin at the 5% limit. The massive inflow of institutional capital is expected to attract Korean funds that have been on the sidelines abroad to return, entering the domestic crypto market through legal channels, supporting the local trading ecosystem, with a potential inflow scale reaching tens of trillions of KRW and over a billion USD.

In addition to directly boosting liquidity, institutional participation will indirectly invigorate the crypto industry ecosystem. Under previous restrictions, large companies found it difficult to engage in crypto, which somewhat suppressed their enthusiasm for blockchain technology exploration. With the opening up, local crypto firms, blockchain startups, digital asset custody, and venture capital sectors are expected to usher in a new wave of development opportunities.

DAT Narrative Cools Down, Can Policy Benefits Materialize?

With institutional legitimacy in holding tokens, the much-anticipated enterprise-grade digital asset treasury (DAT) concept is also regaining investor attention. Cointelegraph analysis indicates that institutional entry will drive local crypto companies to expand and foster the emergence of DATs, attracting overseas crypto institutions to Korea.

However, the outlook for DATs in Korea is not optimistic. On one hand, the 5% investment cap means companies’ crypto allocations are relatively low, making it difficult to form substantial asset portfolios. On the other hand, most crypto treasury companies have suffered significant losses due to “double declines in tokens and stocks.” Apart from pioneers like Strategy with long-term deployments, the DAT narrative has cooled to a freezing point, with global investor interest waning.

More importantly, compliant investment products like Bitcoin spot ETFs launched globally offer more convenient and safer alternatives. Institutions and investors can directly participate in Bitcoin price gains via ETFs without bearing the premium risks associated with corporate token holdings. Korea is also pushing to launch spot ETFs based on Bitcoin and other assets, potentially as early as the end of this year, which will further weaken the attractiveness of DATs.

Stock Market Strength and Crypto Policy Parallel, Market Choices Test Korea

It is noteworthy that in the second half of the past year, South Korea’s crypto market activity continued to decline, with many investors shifting to the stock market. While the KOSPI broke through 4,700 points to reach a new high, crypto market policies were quietly advancing. Sectors with more verifiable fundamentals, such as semiconductors, AI, shipbuilding, and defense industries, are more likely to attract investor attention compared to the vague DAT narrative.

This reflects a harsh reality: even if Korea lifts restrictions, whether institutional funds will truly flood into the crypto market depends on the industry presenting new narratives and value propositions. Policy benefits alone are far from enough; the crypto industry must improve and innovate to regain broad participation from Korean investors.

Korea’s Crypto Market New Chapter Has Begun, Future Still to Watch

Regardless, the policy shift in Korea sends a clear positive signal. From strict regulation to orderly opening, from retail frenzy to institutional participation, this marks the beginning of structural adjustments in Korea’s crypto market. Over the next year, as relevant guidelines and legal frameworks are implemented, the actual investment actions of Korean companies will be closely watched.

Although the DAT narrative faces challenges, the entry of thousands of major players will profoundly change Korea’s market landscape. Whether policy benefits can be translated into real market vitality remains the key challenge for the industry to overcome.