South Korea seeks to lift ban on institutional trading of cryptocurrencies: report
Quick Take
- South Korea’s financial regulator is looking to allow institutional investment in cryptocurrencies in stages, according to local media reports.
- South Korea has effectively banned institutional investments from opening accounts on cryptocurrency exchanges.
South Korea is planning to lift its de facto ban on local institutions trading cryptocurrencies, Yonhap news agency reported on Wednesday, citing the Financial Services Commission (FSC).
The FSC, the country's top financial regulator, reportedly said that it intends to gradually allow institutional investors to open trading accounts on crypto exchanges. The regulator plans to actively work with the Digital Asset Committee, a policy advisory group under the FSC, and start by allowing non-profit organizations first.
Under South Korea’s act on the use of financial information, only retail traders verified with their government names are currently permitted to trade cryptocurrencies. Although the country has not stipulated a ban on institutional investors, the FSC has been advising banks to forbid institutions from opening accounts on exchanges.
Such lifting of restrictions is one of President Yoon Suk-yeol’s election promises with an aim to promote the local crypto sector. Yoon and the ruling People Power Party have also pushed for spot crypto exchange-traded funds to be launched and traded locally, which are currently unavailable.
According to Yonhap, the FSC said it is looking to establish the follow-up regulatory framework to the Virtual Asset Investor Protection Act, which went into effect in July last year. The second part of the law will reportedly focus on establishing rules for stablecoins, crypto exchanges and token listings.
The FSC also plans to amend the Financial Information Act to introduce a screening system for major shareholders of virtual asset service providers.
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