South Korea’s Financial Services Commission (FSC) has announced a new strategy to gradually onboard institutional investors into the cryptocurrency market. This represents a significant change from its previous stance, which largely prohibited corporate involvement in crypto trading.
Phased Implementation Strategy
During the Virtual Asset Committee’s third meeting, officials presented a phased approach, set to begin later this year. The first phase, anticipated for the first half of 2025, will allow government entities, non-profit organizations, and cryptocurrency exchanges to sell digital assets for liquidation purposes.
Subsequently, the second phase will broaden participation to include a wider range of qualified entities. Professional investment firms and publicly listed corporations will gain access through a controlled pilot program. This strategic decision aims to support the increasing domestic demand for blockchain-related projects, aligning with strategies already implemented by several major global economies.
Until recently, institutional participation was effectively blocked after 2017 due to concerns about market speculation and the potential for money laundering. However, the introduction of updated regulatory frameworks, such as the Virtual Asset User Protection Act implemented in July 2024, has created a clearer legal environment for broader market involvement.
Risk Management and Enhanced Oversight
To mitigate potential risks, the FSC intends to implement stringent anti-money laundering protocols, enforce mandatory independent custody arrangements, and require comprehensive disclosure obligations. Financial institutions and cryptocurrency exchanges will be required to rigorously vet corporate candidates to ensure they meet these elevated standards.
Officials also highlighted the challenges associated with the rapid proliferation of new cryptocurrencies on domestic platforms, which has contributed to market volatility. To address this, they plan to implement stricter criteria for listing new digital currencies and enhance transparency measures to prevent market manipulation.
Wider Regulatory Developments
In addition to these changes in crypto trading policy, recent discussions have focused on legislative amendments related to tokenized securities under the Capital Markets Act. Lawmakers are considering revisions that would formally recognize financial instruments based on distributed ledger technology. This step could further encourage the integration of blockchain solutions within the national financial system.
The FSC is expected to work closely with other financial regulators, banking associations, and cryptocurrency exchanges as it finalizes the details of this initiative. While this new roadmap signifies a substantial shift in policy, the degree of corporate involvement in cryptocurrency markets will ultimately depend on ongoing regulatory assessments and prevailing market conditions.
Summary of Key Changes
| Phase | Eligible Participants | Timeline |
| Initial | Government agencies, non-profits, and crypto exchanges | First half of 2025 |
| Secondary | Qualified investment firms and publicly traded companies | Second half of 2025 |
This measured approach emphasizes the commission’s dedication to both expanding the market and ensuring that strong risk management controls remain in place.
Tyler Matthews, known as “Crypto Cowboy,” is the newest voice at cryptovista360.com. With a solid finance background and a passion for technology, he has navigated the crypto world for over a decade. His writing simplifies complex blockchain trends with dry American humor. When not analyzing markets, he rides motorcycles, seeks great coffee, and crafts clever puns. Join Crypto Cowboy for sharp, down-to-earth crypto insights.