Korean companies' crypto asset investment policy takes a turn: the 5% cap is not a constraint but an opportunity

South Korea’s 9-year “Ban on Corporate Cryptocurrency Investment” is about to end, marking an important shift in digital asset policy among major East Asian economies and signaling a strategic adjustment for regulators from outright prohibition to orderly openness. However, this transition is not an unrestricted opening; instead, it involves multiple layers of restrictions. Paradoxically, these seemingly restrictive regulations serve as a reassurance and safeguard for market participants.

The End of a 9-Year Ban: Major Regulatory Changes in South Korea

The Financial Services Commission (FSC) of South Korea is officially drafting regulatory guidelines for corporate investment in cryptocurrencies, with related directives expected to be announced soon. Behind this policy shift is the result of years of observation and research by Korean regulators, aiming to strike a balance between risk prevention and market vitality.

According to reports, the FSC has completed draft guidelines for cryptocurrency trading targeted at listed companies and professional investors, which are expected to be officially released in January or February. Once implemented, Korean companies will gain a legal pathway to include cryptocurrency assets in their books for the first time, setting a precedent among major Asian economies.

Strict Firewalls: How to Protect Investment Security Amid Openness

Unlike more lenient approaches in other countries, South Korea’s new policy has established clear “firewall” mechanisms from the outset. These restrictions are not meant to hinder but to ensure market stability.

Quantitative Limits on Investment Scale are the first line of defense: companies and professional investors can allocate up to 5% of their shareholder equity capital annually to purchase cryptocurrencies. While this ratio appears conservative, it is sufficient in the initial phase to meet companies’ exploratory needs.

Scope of Investment Targets is the second line of defense: currently, the policy only permits the purchase of the top 20 cryptocurrencies by market capitalization. This restriction effectively reduces risks associated with investing in emerging or low-liquidity tokens. Whether stablecoins like USDT and USDC are included in the purchase list is still under discussion, with final details expected in the final version.

Trade Execution Mechanisms are the third line of defense: the new guidelines will incorporate mechanisms such as “split trading” and “price limits” to prevent market volatility caused by large transactions. These technical arrangements demonstrate regulatory meticulousness.

Capital Flows and Market Opportunities: BTC and ETH as Major Beneficiaries

When the top 20 cryptocurrencies by market cap become available for purchase by Korean companies, market flow directions become clear. According to Min Jung, a research associate at Presto Research, this new policy will inject significant institutional capital into the market, but with a high concentration.

Based on the latest market data, Bitcoin’s circulating market cap reaches $1,796.33 billion, and Ethereum’s circulating market cap reaches $364.00 billion, together dominating the entire market. Min Jung points out that because the policy limits investments to the top 20 coins, corporate funds are expected to flow heavily into Bitcoin and Ethereum, with limited room for other competing tokens to share the benefits.

This concentration is not accidental but a natural outcome of policy design and market reality. Smaller projects, while having limited opportunities, are also protected from the risks of excessive speculative capital.

Cautious Corporate Approach: Early Testing Without Restrictions Benefits Long-Term Growth

The 5% investment limit set by regulators has sparked industry discussion. Some argue that this figure is too conservative, but practical logic suggests otherwise. Min Jung notes that for companies taking their first steps, most will adopt a cautious approach initially, and this apparent restriction actually serves as a necessary mechanism for gradual, risk-controlled progress.

This cautious early-stage investment style has deep significance: on one hand, companies can accumulate experience and optimize processes while gradually expanding their investment scale; on the other hand, the market can build mechanisms and pricing capabilities to handle institutional investor entry under limited capital impact.

Regulatory Progress Review: From Ban to Gradual Opening

This policy is not an arbitrary development but a continuation of South Korea’s systematic easing of the “prohibition on institutional trading of crypto assets.”

The entire opening process follows a clear timetable: first, South Korea allowed non-profit organizations and cryptocurrency exchanges to sell their holdings; second, regulators announced plans to open trading of cryptocurrencies for listed companies and professional investors; now, the comprehensive framework for corporate investment policies is taking shape.

This step-by-step approach, each building on the previous, demonstrates FSC’s deep consideration in balancing policy innovation with risk management.

“Digital Asset Basic Law” Coming Soon: The Complete Picture of South Korea’s Cryptocurrency Regulation

The recent corporate investment policy is just one chapter in South Korea’s broader cryptocurrency regulatory landscape. Larger-scale institutional frameworks are also in development.

The “Digital Asset Basic Law,” expected to be introduced in the first quarter of this year, is positioned as a “second-phase comprehensive regulation,” and will serve as the foundational legal framework for South Korea’s crypto ecosystem. The law will set key policies, including regulations for spot crypto ETFs, the supervision framework for the Korean won-stablecoins, and a complete ecosystem aligned with corporate investment policies.

While these policies may seem to impose restrictions on the industry, they are carefully designed by regulators to balance innovation and security, openness and control. South Korea is systematically and gradually building a mature, sustainable crypto regulatory model for Asia.