South Korea Ends Corporate Crypto Ban, Sets 5% Investment Limit
4.7 Investments South Korea has lifted its nine-year ban on corporate crypto investments, allowing companies to invest up to 5% of equity in top cryptocurrencies. The move is expected to boost market growth and institutional participation.
South Korea has ended its nine-year ban on corporate cryptocurrency investments, with the Financial Services Commission (FSC) finalizing guidelines that allow listed companies and professional investors to allocate up to 5% of their equity capital annually to the top 20 cryptocurrencies by market capitalization on the country’s major exchanges. This regulatory shift is expected to unlock significant corporate investment, impacting around 3,500 eligible entities. The guidelines include measures such as staggered execution orders and size limits to mitigate market risks. There is ongoing discussion about the inclusion of stablecoins like USDT. The move is part of broader economic strategies, including the development of won-pegged stablecoins and domestic spot Bitcoin ETFs. While industry participants welcome the change and anticipate increased liquidity and institutional participation, some criticize the 5% cap as too restrictive compared to other regions. The final guidelines are expected by early 2024, with corporate trading likely to begin by year-end, aligning with the upcoming Digital Asset Basic Act.
