South Korea’s FSC to Allow Corporate Investments in Crypto Assets

Highlights:

• South Korea intends to permit corporate investments in crypto to boost market liquidity and innovation.
• The FSC aims to align crypto rules with global standards and enhance user protection.
• The new measures will increase corporate stockholding limits and improve access to virtual asset trading.

South Korea’s Financial Services Commission (FSC) plans to allow corporate investments in crypto assets. As it stands today, corporations still do not have access to real-name accounts needed for trading virtual assets. Financial authorities have advised banks not to open real-name accounts for companies, although there are no legal prohibitions.

The FSC announced its intention to prepare measures for gradual approval, starting with non-profit corporations. The Virtual Asset Committee will oversee the implementation of this plan. Once initiated, a second phase will regulate the issuance and distribution of virtual assets.

Kwon Dae-young, the director, highlighted the need to set the standards and rules of conduct for virtual asset exchanges. South Korea will align its regulations with global frameworks to ensure consistency.

🇰🇷 South Korea's Financial Services Commission (FSC) has expressed its desire to approve corporate investments in crypto assets. pic.twitter.com/NW5e10widU

— cryptothedoggy (@cryptothedoggy) January 8, 2025

New Standards and Self-Regulation for Virtual Asset Exchanges

The FSC is trying to enhance the self regulation of virtual asset exchanges with more stringent screening criteria. Rules for volatile assets, such as meme coins will be part of these criteria. According to the agency, it will use more advanced forensic tools to improve investigations of unfair practices.

The agency will also introduce a system for reviewing the eligibility of major shareholders of virtual asset operators. This system will contain a social credit aspect that will require compliance with regulatory standards.

The FSC also intends to support the introduction of innovative financial services by allowing businesses that apply for the regulatory sandbox to be granted exclusive rights. This will lead to the early adoption of innovative financial systems in the sector.

Strengthening Financial Collaboration and Market Accessibility

The FSC also wants to increase the amount of stock that corporations are entitled to hold. Companies, meanwhile, are currently able to hold up to 5% of a stock in a non-subsidiary firm. The FSC hopes to increase this limit to 15% and give corporations more operational control.

In terms of consignment businesses, the FSC intends to ease regulations. It will also promote data sharing within financial holding groups. The plan includes linking medical savings accounts to individual savings accounts (ISAs).

Further, the FSC will introduce changes to improve systems related to initial public offerings (IPOs) and delistings. The FSC is striving to achieve rational public offering prices for IPOs by strengthening the commitment of institutional investors. The agency will shorten the process for delistings and strengthen listing maintenance conditions.

Global Alignment and Crypto Market Impact

The decision of FSC to allow corporate investments to align with global crypto regulations reflects a growing trend among nations. Many countries are working to integrate virtual assets into their financial systems in 2025. Senator Cynthia Lummis has proposed an elaborate plan to create a strategic reserve for the United States. El Salvador has already adopted Bitcoin as a strategic reserve.

South Korea’s measures could significantly impact the crypto market by enabling broader participation. Allowing corporate investments in crypto assets will increase market liquidity and strengthen the role of virtual assets in the economy.

Additionally, the FSC has been advocating for tax support as well as awards for the best companies in the financial investment industry. The objective of these steps is to strengthen the capital market and support venture capital supply.