South Korea’s FSC to Push Corporate Entry Into Crypto Market This Year

South Korea’s Financial Services Commission will push corporate participation in the virtual-asset market as one of its key tasks this year. The move is intended to rebalance a domestic market dominated by individual investors and lay the groundwork for the second phase of digital-asset legislation.

Herald Business reported on June 16 that Shim Won-tae, an official in the Virtual Asset Division of the FSC’s Digital Finance Policy Bureau, cited corporate market access as one of this year’s policy priorities at a judicial training program held June 15 at the Seoul Southern District Court.

Shim described corporate participation as a prerequisite for the second phase of digital-asset legislation. Regulators want to address the retail-centered market structure before taking up issues including stablecoins and operating rules for virtual-asset service providers.

South Korea’s virtual-asset market has been shaped mainly by individual investors since the government introduced special anti-speculation measures in 2017 and a real-name deposit and withdrawal account system in 2018. Those guidelines have ended, but the issuance of real-name accounts to corporations has continued to be restricted in practice, leaving corporate trading on won-denominated exchanges effectively difficult.

The FSC sees the retail-heavy market structure as a factor behind the domestic market’s stronger tilt toward altcoins. Bitcoin and Ether account for about 70% of the global market, compared with about 40% in South Korea, according to the regulator.

The government plans to open the market to corporations in stages. It will first allow transactions for cashing out holdings, then expand access to investment and treasury transactions and eventually to general corporations.

If listed companies are allowed to participate, authorities plan to introduce safeguards covering anti-money laundering, conflict-of-interest management and broader mandatory disclosure of trading records. Financial regulators have also reviewed tougher bank checks on trading purposes and sources of funds, along with recommending the use of third-party virtual-asset custody and management institutions. Expanding statutory disclosure of transaction details is also under review.

The government is also pushing to establish a statutory industry association to complement the role of the Digital Asset eXchange Alliance, or DAXA. While DAXA currently serves a self-regulatory function, authorities believe it has limits in ensuring enforceability and compliance.

Institutional changes tied to revisions to the Foreign Exchange Transactions Act will also follow. Under the amended law promulgated on June 2, virtual-asset transfer operators must report cross-border virtual-asset transfers to the Bank of Korea’s foreign-exchange data network starting in December.

The information collected will be shared with related agencies including the National Tax Service, the Korea Customs Service, the Financial Supervisory Service and the Financial Intelligence Unit. Authorities plan to use the data to monitor illegal foreign-exchange transactions and trades suspected of tax evasion.