Just-In: South Korea’s FSC To Allow Corporate Investments in Crypto Assets

In a major update from South Korea, the Financial Services Commission (FSC) has expressed its desire to approve corporate investments in crypto assets. This marks a significant move for the crypto market, especially in South Korea where agencies are also contemplating strengthening the collaboration between financial holding companies and fintech companies.

South Korea’s FSC Takes a Stand On Corporate Investments In Crypto Assets

There are multiple angles to begin with but the core focus is on a statement by Director Kwon Dae-young wherein he said that there is a need to discuss ways to create listing standards. A recent report showed that Kwon added that the agency will work to align its framework with the prevailing standards across the globe after asserting that it will work to include rules of conduct for virtual asset exchanges.

A restriction that holds the segment back in South Korea is selective accounts investing in virtual assets along with authorities guiding banks not to issue real-name accounts to corporations. 

The development, if and when approved, is likely to take a first step with non-profit corporations via the Virtual Asset Committee. Once implemented, phase 2 will kick in to include regulations on the distribution and issuance of virtual assets.

Functioning of Corporate Virtual Asset Trading

South Korea’s FSC is planning to bring in a system that will first review a shareholder’s eligibility, and then add social credit requirements. The FSC is further working to improve self-regulation through screening criteria for the likes of meme coins, possibly on the basis of volatility or fluctuations that tokens cause.

Another functioning step in the pipeline is promoting the early institutionalization of innovative financial services. This will support scale-up including those players who are venturing out to apply for innovative sandbox for the first time.

More on the Table by South Korea’s FSC

Ongoing conditions allow companies to hold a maximum of 5% of stocks in companies that are not subsidiaries. The South Korea regulators plan to change that by increasing the limit to 15%, meaning more stock holding might soon be a reality to reflect a larger control in operations.

Finally, there is a plan to offer relaxation for the consignment business in terms of regulation along with activating data sharing within the financial holding groups. Another plan, according to a media report, is to link the ‘medical saving account’ function to ISAs, an acronym for individual savings accounts.

Impact on Crypto

There is a significant impact on crypto as the crypto community sees this as a major recognition and adoption of the crypto segment. South Korea will advance multiple steps by enabling corporate investments in crypto assets since it reflects larger inflows to digital assets, further fueling higher liquidity and bullish sentiments for the future.

However, Bitcoin price today faced a massive pullback amid a broader crypto market crash. Despite that, if the development moves through in South Korea, and if Donald Trump executes his pro-crypto fundamentals, then there is certainty that the crypto segment to make drastic moves in 2025.

The US President-elect continues to tease a brighter future for cryptocurrencies which is evident from his recent dinner meeting with Brad Garlinghouse.