South Korea to Lift Ban on Institutional Crypto Trading

South Korea’s Financial Services Commission plans to lift restrictions on institutional crypto participation. This shift marks a significant move toward integrating digital assets into the nation’s financial sector. 

South Korea's Gradual Policy Shift

Retail traders could participate after a verification process, but institutional investors were kept out. The FSC advised large players to avoid crypto exchanges. This prevented institutions from trading. Now, the FSC plans to reverse this policy. 

The agency will first allow non-profits to engage with the crypto market, then gradually expand to broader institutional access. This phased strategy aims to open up new opportunities while minimizing risks. 

President Yoon Suk-yeol’s administration is pushing to modernize the country's approach. Under his leadership, the ruling People Power Party has become a strong advocate for blockchain technology. 

Strengthening the Crypto Regulatory Framework

Alongside the policy changes, the FSC is enhancing the Virtual Asset Investor Protection Act. This new phase of legislation will introduce stronger regulations for stablecoins, exchanges, and token listings. 

The goal is to build a more transparent, secure, and competitive crypto market for all participants. The FSC also plans changes to the Financial Information Act. These changes will focus on the major shareholders of virtual asset service providers. 

By introducing a screening system, the government aims to ensure the crypto space remains free of bad actors. These updates will help create a more stable environment for both institutional and retail investors.