South Korea to Ease Restrictions on Crypto Trading for Institutional Investors
Reports suggest that South Korea is gearing up to relax its restrictions on crypto trading for institutional investors, marking a significant shift in the country’s approach to digital asset regulation.
Phased Regulatory Changes
According to local media outlet Yonhap, the Financial Services Commission (FSC) in South Korea is set to introduce phased regulatory changes to allow institutions to participate in crypto trading. Currently, the regulations in South Korea limit crypto trading to verified retail investors, with banks prohibited from opening crypto trading accounts for institutional investors.
The FSC plans to collaborate with the Digital Asset Committee to implement these reforms, with non-profit organizations expected to be the first to gain access. This move signifies a change in the government’s stance on institutional involvement in crypto markets.
Virtual Asset User Protection Act Phase Two
The FSC is also gearing up to roll out the second phase of the Virtual Asset User Protection Act, which will set new guidelines on crypto listing standards, stablecoins, and operational conduct for virtual asset exchanges. FSC Director Kwon Dae-young stated that the updated framework aims to align South Korea with global regulations in the digital asset sector.
“We need to discuss how to create listing standards, what to do with stablecoins, and how to create rules of conduct for virtual asset exchanges. We will work to align with global regulations in the virtual asset market.”
Revisions to Special Financial Transactions Act
As part of these efforts, the FSC plans to revise the Special Financial Transactions Act, introducing a review system to evaluate the eligibility of crypto exchange shareholders. Social credit evaluations will be incorporated into the process.
Advancing the Crypto Industry
These actions by the FSC are in line with broader initiatives to further develop South Korea’s crypto industry. One key initiative is the push to launch spot-based crypto exchange-traded funds (ETFs). While these funds have gained popularity in other countries, they are yet to receive regulatory approval in South Korea.
Chairman of South Korea’s Exchange, Eun-Bo Jeong, has advocated for the introduction of crypto ETFs, highlighting their potential to provide dynamic financial instruments that could boost the nation’s capital markets.
