New Guidelines to End De Facto Ban on Institutional Crypto Investment
South Korea’s Financial Services Commission (FSC) is set to release long-awaited guidelines for institutional cryptocurrency investment in the third quarter of 2025. This marks a major shift from the country’s historically cautious stance on digital assets, which has effectively barred institutional investors from entering the crypto market.
The FSC’s plan includes tiered guidelines, with public companies and professional investors receiving rules in Q3, while non-profit organizations and crypto exchanges are expected to have earlier clarity, potentially as soon as April 2025.
South Korea’s Crypto Market Set for Expansion
South Korea is already home to one of the world’s most active crypto markets, with approximately 15.6 million citizens—30% of the population—trading crypto as of late 2024. The introduction of institutional investors is expected to increase liquidity, enhance market stability, and attract foreign investment.
During a meeting with crypto industry experts, FSC Vice Chairman Kim So-young acknowledged that the U.S. administration under Donald Trump has accelerated global discussions on crypto, prompting South Korea to expedite its regulatory approach.
Focus on Best Practices and AML Compliance
The upcoming guidelines will establish best practices for institutional crypto investment, covering areas such as trading standards, financial disclosures, and risk management. The FSC has also emphasized the importance of strengthening anti-money laundering (AML) protocols and cybersecurity measures.
South Korean crypto exchanges are already required to verify user identities with real-name bank accounts, but regulators are pushing for more stringent measures to prevent illicit financial activities.
Stablecoin Regulation and the Future of Crypto ETFs
The FSC is simultaneously working on the second phase of its crypto regulatory framework, which will focus on stablecoins and crypto business oversight.
While local media previously reported that the FSC was reviewing its ban on spot crypto ETFs, the latest announcement did not address this issue. However, with institutional investment opening up, discussions on regulated crypto investment vehicles could gain momentum later this year.
