South Korea’s Financial Services Commission (FSC) is set to allow listed companies and professional investors to invest in cryptocurrencies, ending a ban that has been in place since 2017.
The new policy will enable institutional investors to engage in crypto markets under strict guidelines.
New regulatory framework for corporate investment
The new regulations will permit corporations to invest up to 5% of their equity capital in digital assets such as Bitcoin and Ethereum. These assets must also be among the top 20 cryptocurrencies by market capitalization, based on data from South Korea’s top five exchanges. The FSC has already laid the groundwork by releasing detailed guidelines to public-private task forces.
The changes mark the second phase of corporate participation in the crypto market, initially outlined by the FSC in 2025. According to officials, the final guidelines will be published in the first quarter of 2026, setting the stage for full implementation later in the year. The regulation also includes a limit on the types of assets allowed, restricting investments to virtual currencies within the top 20 and considering the potential inclusion of stablecoins.
The impact of institutional capital on South Korea’s crypto market
Economists predict that the easing of restrictions will significantly boost institutional capital flowing into the crypto space. For example, Naver, one of the country’s largest conglomerates, could invest in Bitcoin by allocating over 5% of its capital into the asset, potentially holding more than 10,000 Bitcoin if the new rules are enacted. This would add substantial value to the country’s crypto market, which already boasts over 10 million retail investors.
However, critics argue that the 5% cap is restrictive compared to other countries, like the United States and Japan, where no such limits exist. Despite these concerns, proponents believe that lifting the ban is a step in the right direction and will contribute to the maturation of South Korea’s crypto market.
Legal precedents in South Korea’s crypto space
In another significant move, South Korea’s Supreme Court ruled that Bitcoin held on cryptocurrency exchanges can be seized under the Criminal Procedure Act. This decision came after a legal dispute over the seizure of 55.6 Bitcoins, valued at approximately 600 million won. The court’s ruling affirmed that digital assets are considered property that can be confiscated in criminal cases, setting a new legal precedent for how crypto is treated under South Korean law.
The decision will have wide-ranging implications, especially in the context of money laundering investigations. It aligns with the growing regulatory framework that seeks to bring more transparency and accountability to the rapidly evolving digital asset landscape.
South Korea’s decision to lift the ban on corporate crypto investments signals a new era of institutional involvement in the digital asset market. While the 5% cap remains a point of contention, the move is expected to drive significant capital inflows and bolster the country’s position as a key player in the global crypto market. The ongoing legal developments further highlight the government’s commitment to establishing a robust regulatory environment for virtual assets.
