- South Korea will allow corporates to trade cryptocurrencies in a phased approach starting with non-profits and universities in H1 2024.
- Listed companies must have minimum financial investments of KRW 5-10 billion to qualify for crypto trading.
- Financial institutions remain excluded due to contagion risks, with focus shifting to security token offerings.
- A new task force comprising FSS, KFB, and DAXA will establish guidelines for corporate crypto access.
- The Korean crypto market remains highly concentrated with Upbit and Bithumb controlling 97% market share.
South Korea‘s crypto landscape is set for a major transformation as the Financial Services Commission (FSC) unveiled plans to end its six-year prohibition on corporate cryptocurrency trading, marking a significant shift in the nation’s digital asset policy.
The regulatory overhaul will proceed in two phases. During the first half of 2024, non-profit organizations, universities, and law enforcement agencies will gain the ability to convert cryptocurrency holdings into cash, particularly focusing on donation receipts and exchange fees. The second half will extend trading privileges to 3,500 listed companies and qualified professional investors.
Corporate eligibility criteria are stringent. Externally audited companies must maintain minimum financial investments of KRW 5 billion ($3.5 million), while others face a higher threshold of KRW 10 billion ($7 million). These requirements position South Korea’s framework as relatively conservative compared to Hong Kong‘s model, which requires HKD 8 million in financial investments and HKD 40 million in total assets.
The FSC’s decision reflects global regulatory trends, with the regulator providing comparative data showing varied approaches across major jurisdictions. While nations like the United States and Japan permit both corporate and retail trading, others including the UK and Singapore maintain restrictions on retail participation.
A newly established task force will oversee implementation, bringing together the Financial Supervisory Service, Korea Federation of Banks, and Digital Asset Exchange Alliance. This group will develop standards for corporate access, including requirements for third-party custody services and enhanced disclosure protocols.
In the exchange sector, market concentration remains high. According to Yonhap News, Upbit commands 70-80% market share, while Bithumb ranks as the only significant competitor. Both exchanges are reportedly reconfiguring their banking partnerships, with Bithumb planning to switch to Kookmin Bank and Upbit considering Hana Bank for fiat operations.
The FSC also confirmed progress on security token legislation, which will classify tokenized securities as electronic securities and establish frameworks for direct token issuance without traditional securities firm intermediation.
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