South Korea to open crypto trading to institutions in 2025

South Korea's Financial Services Commission (FSC) is set to ease restrictions on cryptocurrency trading, allowing institutions to engage more with digital assets starting in 2025.

This marks a shift from previous policies that prohibited institutional accounts on exchanges.

Starting in the second half of 2025, charities and universities will be permitted to sell their crypto donations.

This new regulation will allow these organisations to convert donated crypto assets into cash.

Previously, these organisations could receive digital asset donations but were unable to liquidate them.

Universities will also be able to sell donated crypto for operational funding.

As part of a pilot program, the FSC will allow 3,500 corporations and professional investors to open "real-name" accounts in the first half of 2025.

This initiative aims to broaden institutional crypto involvement, which has been limited since 2017 due to concerns about speculation and money laundering.

The FSC also plans to enable cryptocurrency exchanges to sell their crypto holdings, including user-generated fees.

However, these sales will be regulated to prevent conflicts of interest.

The exchanges will only be able to sell their crypto holdings after receiving a common “Sales Guideline” from the FSC.

To avoid market manipulation, the FSC has released a roadmap that will permit corporations to gradually sell cryptocurrency assets.

The roadmap will allow corporations with at least 10 billion won ($6.8 million) in financial investment product holdings to participate in the digital asset market.

The regulator is also preparing "trading guidelines" to verify the purpose of digital asset transactions and the source of funds.

The FSC will form a task force with the Financial Supervisory Service, the Korea Federation of Banks, and the Digital Asset eXchange Alliance to prepare trading guidelines and implement the corporate roadmap.

While the FSC plans to allow crypto exchanges to sell part of their holdings, they noted “continuous concerns over the phenomenon of sudden price fluctuations” that occur immediately after an exchange lists a token.

To address these concerns, the FSC is considering stricter listing standards and a potential minimum circulating supply of cryptocurrency to avoid price volatility after an exchange listing.