South Korea lifts corporate cipher bans. The ban lift consists of a two-stage plan. This move coincides with the enactment and enforcement of the Korea Virtual Asset User Protection Act.
The South Korean Financial Services Commission (FSC) announces plans to gradually lift the ban on companies trading virtual assets, informing the country’s new era of crypto markets.
The decision comes after years of strict regulations that initially barred institutions from engaging in cryptocurrency trading since 2017 to curb speculation, money laundering and market manipulation.
A step-by-step approach to integration
FSC’s strategy to integrate businesses into the virtual asset market is structured in stages. Initially, in the first half of 2025, entities such as law enforcement, nonprofits, school businesses, and universities will be allowed to sell cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH).
The move is primarily intended to allow these agencies to cash out their holdings and to provide access to virtual asset exchanges for this purpose.
Following this, the pilot program is scheduled for the second half of 2025, with around 3,500 listed companies and companies working to both buy and sell digital currencies, along with specialized investors registered under the South Korean Capital Markets Act. It is permitted. This will introduce a new layer of professional investment in the crypto market, which will allow the market to become even more stable and grow.
Korean Virtual Asset User Protection Law
The lifting of the ban coincides with the enactment and enforcement of the Korean Virtual Asset User Protection Act, introducing significant protection for users in the digital asset sector. This legal framework is part of a broader effort to ensure that markets operate under strict surveillance, reducing the risks associated with virtual asset transactions.
Globally, there is a prominent trend to embrace and integrate cryptocurrencies into traditional finance.
The FSC acknowledges this change and notes that demand for blockchain-related investments and services requires a change in local market dynamics.
To support the transition, the FSC will establish a task force involving a variety of stakeholders, including Financial Supervision Services, the Bank of Korea Federation, and the Digital Asset Exchange Alliance (DAXA). The collaboration aims to develop a comprehensive regulatory framework, including internal control standards for corporate crypto transactions.
The involvement of market participants, such as crypto exchanges and industry experts, is also important to develop practical and effective guidelines.
This approach appears to be cautious yet progressive, aiming to balance innovation and investor protection in a dynamic world of virtual assets.
