South Korea Lifts 9-Year Corporate Crypto Ban; Sets 5% Equity Cap
The FSC’s new guidelines allow 3,500 listed firms to enter the crypto market, but with a hard 5% equity limit and a restriction to top-20 assets.
South Korea’s Financial Services Commission (FSC) has formally ended a nine-year prohibition on corporate cryptocurrency investment, clearing the way for approximately 3,500 listed companies to hold digital assets. The regulatory pivot, reported by Business Korea and Seoul Economic Daily, introduces a strict framework limiting firms to investing 5% of their equity capital annually.
The 5% Constraint
While the ban’s removal signals a major policy shift from the 2017 restrictions, the FSC’s guidelines impose tight guardrails. Corporate treasuries are restricted to the top 20 cryptocurrencies by market capitalization, likely limiting exposure to high-liquidity assets like Bitcoin and Ethereum while filtering out speculative altcoins.
Execution is equally confined: all corporate trading must occur through the country’s five major regulated exchanges, which include Upbit, Bithumb, and Coinone. This centralization ensures regulatory oversight but effectively bars over-the-counter (OTC) desk usage for these entities.
Institutional Context: The ‘Kimchi’ Shift
For nearly a decade, South Korea’s crypto market has been uniquely retail-dominated, often resulting in the “Kimchi Premium,” a price disparity caused by capital control friction and high retail demand. The entry of institutional capital aims to dampen this volatility.
The move positions South Korea to potentially unlock tens of trillions of won in new capital flows into the digital asset market.
However, the 5% equity cap suggests regulators are prioritizing risk management over aggressive adoption. Unlike the U.S. strategy exemplified by MicroStrategy (which holds Bitcoin exceeding its initial market cap), Korean firms like Naver or Samsung face a hard ceiling on their digital asset exposure.
Timeline and Market Reaction
The FSC is expected to issue final guidance between January and February, with full corporate participation targeted by late 2026. Markets remained mute on the news, with Bitcoin (KRW) trading flat at ₩132M (+0.25%), indicating the long lead time before capital deployment has dampened immediate price action.
Regulators are still debating whether to include U.S. dollar-pegged stablecoins like USDT in the approved asset list, a critical decision for firms needing on-chain liquidity for settlements rather than pure treasury appreciation.
