FSC Reverses 9-Year Ban With 5% Investment Cap
South Korea's Financial Services Commission (FSC) has officially reversed a nine-year ban on corporate cryptocurrency trading, first imposed in 2017 to curb rampant retail speculation. Under new guidelines, approximately 3,500 organizations, including publicly traded companies and registered professional investment firms, will be permitted to invest in digital assets. This move is a key component of the government's "2026 Economic Growth Strategy," which also includes plans for stablecoin legislation and spot crypto exchange-traded funds (ETFs).
The new framework imposes tight controls to mitigate risk. Corporate allocations to crypto are capped at 5% of a company’s annual equity capital. Furthermore, investments are restricted to the top 20 cryptocurrencies by market capitalization traded on South Korea’s five major regulated exchanges. This measure channels institutional funds toward highly liquid assets like Bitcoin and Ether while excluding thousands of smaller, more volatile tokens.
Cautious Framework Positions Korea Behind Global Hubs
The reintroduction of institutional capital is expected to enhance market liquidity and narrow bid-ask spreads over time. However, the strict 5% investment limit means large capital inflows from corporate treasuries are unlikely in the short term, suggesting a gradual market impact. This conservative approach is designed to prevent corporate balance sheets from absorbing excessive volatility and to manage systemic risk as regulators gain experience with institutional crypto activity.
South Korea's policy contrasts sharply with other major financial markets. Jurisdictions like the United States, Japan, and Hong Kong do not impose specific percentage caps on corporate crypto holdings. Instead, they rely on existing corporate governance, accounting rules, and comprehensive licensing frameworks to manage risk. The FSC's decision to implement a hard cap signals a clear priority of financial stability over rapid, unregulated growth, positioning the country as a more cautious participant in the global digital asset landscape.
Final Guidelines Expected by Early 2026
The FSC is scheduled to release the final version of these guidelines in January or February 2026, with implementation to be coordinated with the broader Digital Asset Basic Act later that year. If the legislative schedule proceeds as planned, corporate crypto trading could commence before the end of 2026. This move is anticipated to spur the development of domestic digital asset products, including custody services and structured notes, as financial institutions build infrastructure to meet new corporate demand. Industry groups are expected to lobby for higher investment limits once the initial framework proves stable and effective.
