Strict regulations end, the era of Korean companies buying coins begins

South Korea’s 9-year-long cryptocurrency investment restrictions have officially come to an end. According to reports, the Korea Financial Services Commission (FSC) has completed regulatory guidelines for cryptocurrency trading targeting enterprises and professional investors, which are expected to be officially launched in early 2025. This marks Korea’s gradual transition from strict policy constraints to an orderly and institutionalized market opening.

The 9-year-long Crypto Ban Is Coming to an End

Since 2016, the Korean government has implemented a comprehensive ban on corporate investments in cryptocurrencies. The strict policy aimed to prevent financial risks caused by excessive speculation by enterprises. Now, as the market matures and global recognition of digital assets increases, Korean regulators are beginning to reconsider whether this all-or-nothing ban is overly absolute.

As early as mid-2025, Korea has gradually relaxed restrictions, allowing non-profit organizations and crypto exchanges to sell their holdings of digital assets. The government has also announced plans to further open up in the second half of the year, permitting listed companies and professional investors to participate in trading. These measures indicate that the era of strict bans is gradually evolving into a relatively open regulatory environment.

Five Major Regulatory Safeguards Protect Corporate Investment

To maintain risk control amid opening up, the new regulatory guidelines have established multiple safeguards. First, investment limits are strictly capped at 5% of corporate shareholder equity capital, meaning even if companies intend to make large entries, their scale will be kept relatively conservative.

Second, the scope of eligible investment assets is limited to the top 20 cryptocurrencies by market capitalization. According to the latest data, Bitcoin (BTC) has a circulating market cap of $180.024 billion, and Ethereum (ETH) reaches $36.496 billion. These two leading coins are expected to become the primary targets for inflows.

As for whether stablecoins like USDT and USDC will be included in the legal purchase list, discussions are still ongoing, and no final decision has been made.

Additionally, to prevent market volatility caused by large transactions, the guidelines will introduce a “split transaction mechanism” and “price limit measures” to ensure market stability.

Top 20 Market Cap Coins Become the First Approved Investment Options

Limiting investments to the top 20 cryptocurrencies by market cap creates clear benefits distribution differences among various coins. Min Jung, a research associate at Presto Research, pointed out: “This policy will inject considerable liquidity into the crypto market, but because the investment scope is limited to the top-ranked coins by market cap, it is expected that funds will largely concentrate on Bitcoin and Ethereum, with limited benefits for other competing coins.”

Institutional Funds Flow into BTC and ETH

The industry generally believes that, although the 5% investment cap appears conservative, for enterprises venturing into digital assets for the first time, a tentative approach in the initial stage is normal. Therefore, this restriction is unlikely to pose a substantial obstacle. In the long term, as companies become more familiar with the market, this ratio is expected to be gradually adjusted.

As the two largest assets by market cap, BTC and ETH will attract the majority of corporate funds. This will have a positive impact on overall market liquidity and price discovery mechanisms.

The “Digital Asset Basic Law” to Be Released Within the Year, Second-Phase Regulation to Commence

The most anticipated development in Korea’s crypto scene is the release of the “Digital Asset Basic Law,” expected to be announced in the first quarter of 2025. Seen as the “second-phase comprehensive regulatory framework,” this legislation will set standards for the issuance and trading of spot cryptocurrency ETFs and establish a regulatory framework for the Korean won stablecoins.

Once enacted, this law will set the tone for the long-term development of Korea’s digital asset market, further promoting the shift from strict regulation to institutionalized openness, and providing clearer policy expectations for enterprises and investors participating in the crypto market.