South Korea Ends 2017 Crypto Ban, Allows Institutions To Trade Bitcoin

South Korea is preparing to reopen its cryptocurrency market to corporate investors.

According to Seoul Economic Daily, the Financial Services Commission (FSC) is revising its guidelines to allow crypto investments by listed companies and professional investors, effectively reversing a 2017 prohibition. At that time, authorities barred institutional participation due to concerns over money laundering and market instability.

A senior FSC official said the final rules are expected to be announced in January or February. Once implemented, legal entities would be permitted to engage in virtual asset transactions for investment and financial management purposes.

Investment Caps and Market Safeguards

To limit systemic risk, the FSC plans to establish clear boundaries on corporate participation. Specifically, companies would be allowed to allocate up to 5% of their equity capital to cryptocurrency investments.

Moreover, eligible assets would be limited to the top 20 cryptocurrencies by market capitalization, and all transactions would have to be conducted through South Korea’s five largest regulated crypto exchanges. Together, these measures will expand market access while maintaining financial stability.

Stablecoins Remain Under Review

Despite progress on the core framework, some elements remain unresolved. In particular, the inclusion of U.S. dollar–pegged stablecoins is still under discussion.

Assets such as Tether’s USDT have not yet been approved under the proposed rules. The FSC shared its latest draft guidelines with a crypto-focused working group on January 6. Earlier, in February 2025, the commission outlined a phased approach to easing restrictions on corporate crypto investment.

Potential Capital Inflows and Market Impact

The regulatory shift could unlock substantial capital for South Korea’s domestic crypto market. Seoul Economic Daily reported that tens of trillions of won could potentially flow into digital assets if corporate participation is permitted.

The outlet cited Naver as an example. With equity capital of approximately 27 trillion won, the technology group could acquire around 10,000 Bitcoin under the proposed limits. Such scenarios underscore the potential scale of institutional involvement.

Implications for ETFs and Industry Expansion

Beyond direct investment, the policy change may have broader implications for South Korea’s crypto ecosystem. Specifically, approval for corporate participation could accelerate discussions around spot Bitcoin exchange-traded funds, which have gained public support but have yet to receive regulatory clearance.

Furthermore, easier access to digital assets could also support the growth of domestic blockchain firms, crypto companies, and digital asset treasuries. Until now, many large South Korean corporations have invested in overseas markets to sidestep domestic restrictions.

Alignment With Broader Digital Finance Strategy

The move to reopen corporate crypto investment aligns with South Korea’s broader digital finance ambitions. The government aims to process 25% of national treasury transactions through a central bank digital currency by 2030, according to Seoul Economic Daily.

This objective forms part of the 2026 Economic Growth Strategy, which also proposes a licensing framework for stablecoin issuers. Under the plan, issuers would be required to maintain full reserve backing and provide legally guaranteed redemption rights.

Taken together, these initiatives indicate a cautious yet deliberate effort to integrate digital assets more deeply into South Korea’s financial system.