New Rules for Corporate Investors

South Korea is preparing a regulatory reform that will allow companies and professional investors to allocate up to 5% of their equity capital to cryptocurrencies annually. The initiative, developed by the Financial Services Commission (FSC), effectively ends the country’s nearly decade-long ban on institutional participation in the crypto market.

Investments will be limited to the top 20 cryptocurrencies by market capitalization, ensuring sufficient liquidity. The potential inclusion of USD-pegged stablecoins remains under review.

Reasons Behind the Reform and Expected Impact

The prolonged dominance of retail traders has contributed to significant capital outflows. In 2025 alone, approximately USD 110 billion in crypto assets left the country. Authorities expect that allowing institutional involvement will boost domestic liquidity and reduce the scale of these outflows.

Corporate participation may begin as early as the end of the year. This measure continues the regulatory changes introduced in 2025, when certain organizations were first permitted to sell digital assets.

Risk Controls and Market Expectations

To mitigate volatility and operational risks, the regulator plans to implement requirements for segregated trading and price limits. Analysts anticipate that institutional demand will focus primarily on Bitcoin, with Ethereum also expected to benefit. Interest in smaller assets is likely to remain limited despite the expanded list of eligible cryptocurrencies.

By adopting this approach, South Korea diverges from Hong Kong and Japan, where corporate crypto investment rules have recently been tightened, highlighting differing regional strategies toward balancing innovation and financial stability.

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