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South Korea is looking to remove restrictions on local institutions trading cryptocurrencies, according to a report by Yonhap news agency on Wednesday, citing the Financial Services Commission (FSC).
“We will work to align with global regulations in the virtual asset market,” stated South Korea’s FSC Secretary-General Kwon Dae-young.
Institutional Investors Will Be Able To Create Accounts On Crypto Exchanges
The FSC, South Korea’s primary financial regulator, stated that it would relax its restrictions on institutional investors to trade crypto, allowing them to create trading accounts on cryptocurrency exchanges. By doing this, the regulator aims to collaborate closely with the Digital Asset Committee, a policy advisory group under the FSC, beginning with permitting non-profit organizations to participate.
Currently, only individual investors verified with their real-name accounts are permitted to trade Bitcoin and other cryptocurrencies. South Korea didn’t restrict institutional investors; however, the FSC advises banks to block institutions from creating accounts on exchanges. For many years, banks have remained unfriendly to institutional trading.
With the idea of promoting the local crypto market, President Yoon Suk-yeol promised to remove restrictions on crypto trading among institutional investors. The ruling People Power Party and Yoon support the launch and local trading of cryptocurrencies, which are currently unavailable.
Yonhap said the FSC is working on developing an additional regulatory framework for the Virtual Asset Investor Protection Act, which came into effect in July last year. This new law will also cover stablecoins, crypto exchanges, and token listing regulations.
South Korea seeks to lift ban on institutional trading of cryptocurrencies: report.
The FSC, the country's top financial regulator, reportedly said that it intends to gradually allow institutional investors to open trading accounts on crypto exchanges https://t.co/1qLnQSALs8— DigitaSoja.X (@DigitaSoja) January 8, 2025
FSC Plans On Changing The Financial Information Act
The FSC plans to change the Financial Information Act to implement a reviewing system for large shareholders of virtual asset service firms.
The FSC wants to enhance self-regulation in the crypto industry by creating more strict screening criteria. Additionally, the agency plans to implement forensic tools to detect and address illegal trading activities, creating a safer environment for users.
Despite these progressive changes, South Korea’s crypto industry faced significant challenges due to political instability.
In December 2024, President Yoon Suk Yeol declared martial law amid rising tensions, temporarily suspending legislative priorities.
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