South Korea to lift crypto trading ban on corporations

South Korea plans to gradually allow corporations to begin trading crypto, according to the latest announcement by the Financial Services Commission.

On Feb. 13, the SFC released a press release in which it outlined a phased lift on a ban that prohibited institutions from participating in the virtual assets trading market. Reports that South Korea was mulling a lift its institutional crypto trading ban emerged early this year.

In phase one of the program, authorities will allow law enforcement agencies, non-profit organizations, school corporations and universities to sell crypto such as Bitcoin (BTC) and Ethereum (ETH). This will be for cashing out purposes, with these entities allowed to access the services on virtual asset exchanges in the first half of the year.

South Korea will then roll out a pilot program for buying and selling crypto for roughly 3,500 listed companies and corporations. This is expected to go live in the second half of the year and will bring digital asset trading to professional investors registered under the country’s Capital Market Act.

A ban on crypto trading for corporations and other professional entities has been in place since the government’s restrictions in 2017. This move looked to address speculation, money laundering and market manipulation.

Per the SFC, the enactment and enforcement of the country’s Virtual Asset User Protection Act has put in place key protections for users. 

Also notable is the global trend that has seen other countries allow corporations to enter and participate in the digital asset market. Demand for blockchain related investment and services also means the local market has to shift, the regulator noted.

The FSC plans to form a task force involving related organizations, with a view to releasing a regulatory framework for internal control standards. Helping to formulate the crypto trading guidelines will be the Financial Supervisory Service, the Korea Federation of Banks and Digital Asset eXchange Alliance, or DAXA.

Collaboration with market participants such as exchanges and industry experts is also crucial to the roadmap targeting corporate foray in the virtual asset market, FSC noted.