South Korea eases rules on company crypto holdings

South Korea’s financial authorities will allow listed companies and professional investors to invest directly in crypto, ending a restriction that has been in place since 2017.

The Financial Services Commission, the country’s top financial regulator, wants to bring institutional capital into the digital currency market that is currently dominated by retail traders. More than 3,500 listed companies and investor-registered corporations will be permitted to invest up to 5% of their equity capital in virtual assets like Bitcoin and Ethereum.

The law changes are part of the second phase of corporate participation in the virtual currency market, which the Financial Services Commission first outlined in February last year.

South Korea’s FSC lay new regulatory groundwork for corporate crypto investments

According to local news outlet Seoul Economic Daily, the FSC completed the first steps toward implementation at the start of the year. The regulator had already established guidelines governing crypto trading by listed entities and shared them with a public-private task force on January 6. 

Previously, authorities had said they would pursue coin investment by listed companies and professional investor-registered corporations after the second half of 2025. A senior financial official familiar with the discussions said the authorities will release the final guidelines in January-February, which will greenlight virtual currency transactions for investment and financial purposes by legal entities within the year. 

They also mentioned the commission is in talks with lawmakers to release a legislative proposal of the Framework Law on Digital Assets, expected in the first quarter of 2026. In the framework, each company will face an annual deposit or investment ceiling capped at 5% of its equity capital. 

Companies will be allowed to invest only in virtual currencies ranked within the top 20 by market capitalization, based on half-yearly figures published by the country’s five largest cryptocurrency exchanges. Dollar-backed stablecoins’ inclusion is under discussion, since the country could soon launch a won-pegged stablecoin by January 20, Business Korea reported.

Some market participants have welcomed the decision to allow corporate investment, saying the decision has been long overdue. However, some have criticized the 5% cap as overly restrictive compared with the situation in the United States and Japan, where no explicit limits have been imposed on corporate crypto investment.

“The constitution of the domestic virtual currency market will improve once corporate transactions begin,” said one insider, who also explained that the limits could weaken capital inflows and fend off virtual asset investment firms.

South Korea expects institutional inflows in Bitcoin

The government lifting a nine-year-old barrier for listed companies could lead to tens of trillions of won into the market, according to economists in the country. Conglomerate Naver, which merged with Upbit owner Dunamu last year, held equity capital of about 27 trillion won as of September. 

If the new rules are enacted, the company could allocate more than 5% of that amount into bitcoin holdings exceeding 10,000 units at prices of roughly 130 million won per coin. Market participants also expect related initiatives to gain momentum once corporate investment capacity is secured, including the potential launch of a Bitcoin spot exchange-traded fund.

South Korea’s virtual currency sector surpassed 10 million investors in the first half of last year, but individual traders account for nearly all activity since 76 trillion won flowed overseas.

In other related regulatory news, South Korea’s Supreme Court ruled last week that Bitcoin held on cryptocurrency exchanges can be seized under the Criminal Procedure Act. The judgment came from a dispute over whether digital assets qualify as property subject to confiscation.

Local police had seized 55.6 bitcoins valued at about 600 million won from an exchange account linked to an individual identified as Mr. A. The assets were taken during a money laundering investigation. However, Mr. A challenged the seizure, arguing that bitcoin stored in an exchange account was not a physical object under Article 106 of the Criminal Procedure Act.

The plaintiff had taken his case to lower courts, which rejected the argument, and he saw an appeal at the Supreme Court, which upheld those rulings. “Under the Criminal Procedure Act, seizure targets include both tangible objects and electronic information,” the court said.

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