South Korea’s Financial Services Commission (FSC) announced that select institutional investors will be allowed to open virtual asset trading accounts starting in the second half of this year. The move will allow about 3,500 corporate entities, including public companies, to participate in the trial.
The FSC has acknowledged the strong demand from institutional investors, also referred to as qualified investors, to engage in blockchain-related business activities. This demand has influenced the decision to allow these entities to invest in cryptocurrencies. The commission also noted that this move is crucial to ensure South Korea keeps pace with other countries that are increasingly integrating virtual assets into their economies.
Despite the potential benefits, the FSC is aware of the risks associated with increased corporate participation in the virtual asset market. To address these concerns, the commission plans to implement enhanced safeguards. This includes preparing transaction guidelines, which will assist banks in verifying the purpose of transactions and the origin of funds.
In addition, virtual asset exchanges will be encouraged to use third-party custody and management services, and to improve disclosure of information available to investors.
Banks and virtual asset exchanges will be responsible for conducting detailed screening of institutions applying to open virtual asset trading accounts. The FSC has decided to exclude financial firms from this opportunity based on the recommendation of its virtual asset committee, which aims to prevent potential risks affecting the wider financial system.
For companies not classified as eligible investors, the FSC has stated that further decisions will depend on the evaluation of virtual asset market developments and trial results, along with other factors.
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