Korea Ends 9-Year Corporate Crypto Ban; Guidelines Cap Buys at 5% Equity

South Korea’s Financial Services Commission (FSC) has formally drafted guidelines to lift the 2017 ban on corporate cryptocurrency investment, signaling a massive liquidity shift for the local market. The draft, shared with an industry-government task force on January 6, permits listed companies to allocate up to 5% of their equity capital into digital assets, specifically limiting exposure to the top 20 tokens by market capitalization.

The Institutional Guardrails

The new framework targets approximately 3,500 entities, strictly defined as listed companies and "professional investor corporations" that meet capital market standards. This move explicitly excludes retail investors from these corporate-grade accounts, segregating institutional flows from the retail-heavy Kimchi premium market.

The investment cap is limited to 5% of company equity capital, and eligible assets are limited to top 20 coins by market cap.

Regulators aim to publish the final text by February. While the draft guidelines open the door to buying, they come with a sting: strict "liquidation only" provisions for non-compliant assets. Analysts warn this creates a "bizarre market dynamic" where the immediate reaction might be a liquidity drain as firms dump gray-market holdings to reset for compliant entry.

Market Reaction

Bitcoin (BTC) held steady at $91,980 (+1.5%), while Ethereum (ETH) traded at $3,153 (+2.0%) following the news. The exclusion of smaller altcoins (outside the top 20) forced a rotation into majors, as treasuries prepare to front-run the authorized corporate bid. This "whitelist" approach mirrors the FSC’s historical caution, effectively rendering 99% of the crypto market uninvestable for Korean corporates.