South Korea’s FSC Moves to Allow Corporate Investments in Crypto Assets

KeyTakeaways:

• FSC to introduce regulations on corporate investments in digital assets.
• Plan includes reviewing shareholder eligibility and social credit checks.
• Move expected to increase crypto market liquidity and institutional adoption.

South Korea’s Financial Services Commission (FSC) is set to approve corporate investments in cryptocurrency, a move expected to reshape the digital asset landscape. This step comes after increasing discussions about strengthening the country’s relationship between financial holding companies and fintech firms. 

The regulatory body aims to create a framework allowing corporations to invest in crypto assets, marking a shift in South Korea’s crypto policies.

The proposed framework will begin by assessing shareholder eligibility, followed by a review of companies’ social credit requirements. In addition, the FSC plans to address the growing demand for institutionalized financial services by fostering early-stage corporate involvement.

This will help improve scalability for businesses interested in innovative financial products, particularly those applying for sandbox programs for the first time.

Moreover, the FSC is working to align its regulatory framework with global standards for virtual asset exchanges. This includes formulating rules of conduct that will apply to such exchanges, ensuring they meet criteria similar to international best practices. 

This move is expected to provide more stability and transparency in the local market, which could promote greater corporate engagement with crypto assets.

One of the most notable changes could be lifting restrictions on corporate investments in virtual assets. Currently, regulations limit corporations to holding no more than 5% of stocks in non-subsidiary companies. However, the FSC plans to increase this cap to 15%, giving companies more flexibility in managing their investments.

The FSC’s initiative will likely improve crypto self-regulation by introducing screening mechanisms for highly volatile assets like meme coins. This will provide a more structured approach to corporate crypto trading, which has long been a subject of regulatory concern. 

Additionally, the FSC pushes for a more relaxed regulatory environment for consignment businesses, facilitating better data-sharing practices within financial groups.