South Korea’s Financial Services Commission (FSC) is adopting a phased approach to allow businesses to trade cryptocurrencies, marking a significant shift in its regulatory stance. The financial regulator aims to gradually include enterprises in the digital asset market while ensuring safeguards against financial risks.
According to local media reports, the FSC announced its plan following the third meeting of the Virtual Asset Committee held on February 13.
Phase One: Focused Institutional Access (First Half of 2025)
In the first phase, law enforcement agencies, non-profit organizations, and virtual asset exchanges will be permitted to open real-name cryptocurrency accounts for specific use cases.
Since November 2024, agencies including prosecutors’ offices, the National Tax Service, and Korean Customs have already been allowed to open accounts to facilitate asset seizures and tax enforcement. Non-profit organizations will gain access in Q2 2025 to handle cryptocurrency donations, though they must establish internal fund management controls. Meanwhile, exchanges will be allowed to convert fee income into fiat currency. However, their ability to sell assets will be restricted under regulatory guidelines to prevent market manipulation.
Phase Two: Professional Investment Entities (Second Half of 2025)
In the second phase, professional investment companies—including listed firms and certified investment entities—will be permitted to trade cryptocurrencies. These entities must comply with strict anti-money laundering (AML) requirements and undergo screening by banks and exchanges.
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This phase reflects the government’s effort to balance market openness with financial security, enabling experienced institutions to participate under clear compliance frameworks.
Phase Three: Broader Corporate Participation (Long-Term Goal)
Extending access to general corporations is listed as a long-term third-phase goal. Authorities emphasize that additional regulatory frameworks—such as stablecoin regulations and foreign exchange monitoring—must be established before approving wider participation.
FSC Vice Chairman Kim So-young stated that discussions would prioritize Phase Two cryptocurrency regulations, focusing on stablecoins and security token offerings. She also reiterated the government’s commitment to fast-tracking legislative amendments necessary for comprehensive corporate adoption of digital assets.
Frequently Asked Questions
What is the purpose of South Korea’s three-phase plan?
The plan aims to safely integrate businesses into the cryptocurrency market through controlled phases, reducing financial risks while expanding institutional participation.
Which entities are included in Phase One?
Phase One permits law enforcement, non-profits, and exchanges to use real-name cryptocurrency accounts for specific functions like seizures, donations, and fee conversion.
When can professional investment firms start trading?
Professional investment companies, including public firms, are expected to begin trading in the second half of 2025, subject to strict AML checks.
What are the requirements for non-profits receiving crypto donations?
Non-profits must establish internal fund management controls before they can receive cryptocurrency donations, starting in Q2 2025.
Why is corporate access delayed until Phase Three?
General corporate access requires additional regulatory frameworks, such as stablecoin and foreign exchange oversight, to ensure secure and compliant operations.
What is the focus of regulatory discussions for Phase Two?
Discussions will center on stablecoins and security token offerings, ensuring these assets meet compliance standards before broader adoption.