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South Korea plans to lift its ban on cryptocurrency trading by local institutional investors.
South Korean regulator Financial Services Commission (FSC) announced that it intends to gradually ease its chokehold on institutional crypto investment, according to a recent report by local news outlet Yonhap. The FSC reportedly intends to start allowing institutional investors to open trading accounts on cryptocurrency exchanges/
The details
The FSC plans to develop a new regulatory framework jointly with the Digital Asset Committee policy advisory group. Nonprofits are the first South Korean institutions to be allowed access to the crypto market.
According to the nation’s current rules imposed on institutional investors, only retail traders who have verified their personal identities are currently permitted to trade digital assets. While no formal ban for institutional participation in the market is in place, the FSC advised banks to forbid institutions from opening accounts on crypto exchanges.
The lifting of those restrictions is among the election promises of South Korean President Yoon Suk-Yeol, aiming to strengthen the local cryptocurrency industry. The president and his People Power Party have also worked to allow for the launch of local spot cryptocurrency exchange-traded funds—currently unavailable in the nation.
According to the report, the regulator is currently developing a follow-up regulatory framework to the Virtual Asset Investor Protection Act introduced last summer. This expansion of the crypto regulatory framework will reportedly also establish clearer rules for stablecoins, cryptocurrency exchanges, and token listings.
The news follows late November reports that after a delay in plans to implement taxation, the government in South Korea – the Democratic Party of Korea (DPK) – will move ahead with the enforcement of a 20% crypto tax. This hike was originally planned for January 2022, but the plans faced criticism from industry experts and investors which caused it to be halted.
