According to Yahoo citing Yonhap News, the move would allow institutional investors to open accounts on local cryptocurrency exchanges, which have so far been predominantly limited to retail traders.
Under current regulations, only retail investors, verified using their government-issued names, are allowed to trade cryptocurrencies. While no explicit ban exists on institutional trading, the FSC has previously advised banks to prevent institutional entities from accessing trading accounts on crypto exchanges.
The proposed changes align with President Yoon Suk-yeol’s campaign pledge to support the growth of the domestic cryptocurrency industry. In addition, the ruling People Power Party has backed initiatives to introduce cryptocurrency-related financial products, such as spot exchange-traded funds (ETFs), which are currently unavailable in South Korea.
The FSC plans to initiate the changes by first permitting non-profit organisations to trade cryptocurrencies. The commission is also expected to collaborate with its advisory body, the Digital Asset Committee, to establish a comprehensive regulatory framework for the sector.
As part of its wider regulatory strategy, the FSC is considering amendments to the Financial Information Act. These changes would introduce stricter screening mechanisms for major shareholders of virtual asset service providers, aiming to enhance investor protections.
Additionally, the FSC is working on implementing secondary regulations under the Virtual Asset Investor Protection Act, which became effective in July of last year. This next phase of regulation will address key areas, including rules for stablecoins, token listing requirements, and operational guidelines for cryptocurrency exchanges.
The planned updates represent a significant shift in South Korea's approach to institutional involvement in the cryptocurrency market, signalling a step toward a more inclusive and regulated environment.
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