Ban on crypto trading for companies?
In 2017, South Korea banned institutions from entering the crypto market due to a surge in retail speculation. Regulators then saw a high risk in money laundering, market manipulation and a possible impact on financial stability. Access was limited for companies and professional investors, while retail could trade with strict KYC and compliance requirements.
Such a decision has shaped the market in the long run. Retail took over most of the volume, while domestic institutions remained outside one of the fastest-growing asset classes. Because of this, part of the capital began to spill out, through foreign exchanges and various investment products.
At the same time, developed markets such as the US have moved in the opposite direction. Institutional capital gradually entered through regulated futures products, custody solutions and later spot ETFs. By 2024, institutions already accounted for a large part of the volume on global platforms.
Source: cointelegraph
What do the new rules for businesses in South Korea allow?
According to new guidelines issued by the Financial Commission, about 3,500 organizations will be allowed to trade cryptocurrencies. This includes publicly listed companies and registered investment firms.
For starters, crypto investments will be limited to a maximum of 5% of the company’s annual capital. The goal is to reduce risk and prevent overexposure, while regulators monitor how the entry of institutions will affect the market.
Investments are limited to only the 20 cryptocurrencies with the largest market capitalization. Trading will take place on five major regulated domestic exchanges. This puts the focus on large and liquid coins like Bitcoin and Ether, while most smaller and more volatile projects remain out of the game.
The status of a stablecoin like USDT has not yet been fully defined. Regulators state that a special assessment process will be carried out for them. Additional regulations related to payment systems and financial infrastructure are also possible.
Exchanges will have to introduce additional mechanisms for institutional orders, such as gradual execution and limits on the size of individual orders. The goal is to reduce sudden price movements and avoid situations where large orders distort the market.
Source: cointelegraph
How will the entry of companies change the crypto market in South Korea?
The decision to allow companies limited participation in the crypto market is a step towards greater involvement of institutions. Together with the new regulations to come, this will change the way the market works over time.
Liquidity and market structure
The entry of companies is changing the dynamics of the market. Institutional players tend to invest for the long term, use a variety of strategies, and have more serious risk management. This can increase liquidity, reduce the difference between the buy and sell price, and mitigate the dominance of short-term retail trading.
On the other hand, the 5% limit means that the amount of capital that can enter crypto from companies is not large initially. Because of this, the impact on the market will be gradual, not instantaneous.
Source: cointelegraph
Domestic financial products
The entry of institutions opens up space for new financial products. These include crypto ETFs, structured products, and asset custody services. For banks and asset managers, higher demand can justify additional investments in digital asset infrastructure.
This may strengthen South Korea’s position relative to other financial centers in Asia such as Hong Kong and Singapore, which are already actively attracting crypto companies and institutional investors.
Interestingly, some Korean conglomerates are already using blockchain for supply chain monitoring and digital certificates. This means that companies have already gotten into this technology before, before they started considering direct investments in crypto.
Comparison with other countries
South Korea’s approach is more cautious compared to large markets. In the US and part of Europe, there are no fixed limits on how much companies can hold crypto, but they still have to comply with accounting rules and obligations to investors.
Japan and Hong Kong also allow institutions to participate without fixed limits. The focus is on licensing, custody rules, and controlling market behavior.
The South Korean model opens the door to companies, but with limitations. The idea is to gradually increase participation until regulators gain more confidence in market stability.
Source: cointelegraph
What happens next?
The final version of the guidelines is expected to be published by the Financial Commission in the first half of 2026. The implementation will go in parallel with the new digital asset law later in the year. If all goes according to plan, companies could start trading crypto before the end of the year.
Adjustments to the rules are also possible if the market remains stable and the surveillance system proves to be working. The industry is likely to look for higher limits and a wider selection of coins after this initial phase.
A Balance Between Stability and Development
The lifting of the long-standing ban for companies is a major change in access to crypto. After almost ten years where retail dominated, institutions are finally gaining access to the domestic market, but with a lot of restrictions.
Whether this will grow into a fully open market for institutions will depend on several factors. First of all, about market stability, how companies manage risk and how successfully regulators enforce the rules.
One thing is clear. South Korea no longer views the participation of companies in crypto as a problem, but as something that can be controlled through clear rules.