SEOUL. The nine-year institutional freeze in South Korea is officially over. The Financial Services Commission (FSC) issued new guidelines Monday permitting domestic corporations to purchase cryptocurrencies, effectively reversing the 2017 administrative guidance that had severed the country’s institutional capital from the digital asset market.
The policy shift opens the door for approximately 3,500 entities, specifically publicly listed companies and registered professional investment institutions, to enter the market. However, regulators have imposed a hard ceiling: corporate exposure is capped at 5% of net assets or equity capital. The move, signaled earlier in the 2026 Economic Growth Strategy, is designed to force a controlled reentry rather than a speculative flood.
Strict Guardrails: The 'DAXA Only' Rule
The FSC’s framework is restrictive. Corporate trading desks are confined to the 'Top 20' cryptocurrencies by market capitalization, filtering out high-risk altcoins. Furthermore, all execution must occur on South Korea’s five major regulated exchanges—Upbit, Bithumb, Coinone, Korbit, and Gopax—collectively known as the Digital Asset Exchange Alliance (DAXA).
To mitigate market impact, regulators will also require exchanges to implement staggered order execution and size limits.
This "staggered execution" mandate is a direct response to liquidity concerns; Korean order books are notoriously thin compared to global venues like Binance. By forcing large orders to be broken up, the FSC aims to prevent institutional whales from inducing the kind of volatility that triggered the original 2017 ban.
The Institutional Context
This reversal follows the implementation of the Virtual Asset User Protection Act, which established the legal groundwork for this pivot. For nearly a decade, the disconnect between Korea’s frantic retail market—often trading at a "Kimchi Premium"—and its sidelined corporate sector created significant inefficiencies. Allowing firms to hold crypto on balance sheets legitimizes the asset class locally, though the 5% cap suggests the government still views it as a diversification tool rather than a primary treasury strategy.
One critical question remains unresolved: Stablecoins. Regulators are still debating whether dollar-pegged assets like USDT will be included in the permissible list, a decision that will determine if Korean firms can effectively use crypto for cross-border settlement or merely for passive investment.
