South Korea Prepares to Release Guidelines for Institutional Crypto Investments

The Financial Services Commission (FSC) announced in a meeting with local crypto industry experts that it plans to issue comprehensive guidelines for institutional cryptocurrency investments by the third quarter. Investment guidelines for public companies and professional investors are expected to be published in the third quarter, while the FSC aims to release guidelines for non-profit organizations and crypto exchanges earlier, targeting April.

In January, the FSC revealed its plans to gradually lift the de facto ban preventing institutional investors from investing in cryptocurrencies. Last month, the regulator announced that it plans to allow charities and universities to sell their crypto assets in the second quarter.

The release of these detailed guidelines marks a significant shift in South Korea’s stance on crypto, moving away from its strict opposition to cryptocurrency assets in traditional financial markets.

Institutional participation could accelerate growth and significantly boost liquidity in South Korea’s crypto market, one of the largest and altcoin-heavy retail crypto markets in the world. By the end of November 2024, around 15.6 million people were trading crypto in South Korea, which is approximately 30% of the population.

FSC Vice Chairman: Rapid Steps Being Taken to Support Crypto Market

At the meeting, FSC Vice Chairman Kim So-young stated that South Korea is taking rapid steps to support its crypto market and acknowledged that the Donald Trump administration accelerated global discussions on cryptocurrency.

Kim emphasized that the upcoming guidelines should set “best practices” for institutional crypto investments and include standards for crypto trading, disclosure, and reporting.

The FSC official also encouraged local banks and crypto exchanges to enhance their anti-money laundering and cybersecurity measures to prevent potential illegal activities and cyberattacks. According to local regulations, crypto exchange users are required to verify their accounts with real-name bank accounts.

Local media reported last year that the FSC was reviewing its ban on local spot cryptocurrency exchange-traded fund (ETF) listings, but this topic was not mentioned in the latest FSC release.

Meanwhile, the FSC has started developing the second part of its crypto regulatory framework, which was introduced last year. The second part of the crypto law is expected to focus on stablecoins and regulating crypto business owners.

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