Giannis Andreou

After a nine-year break, South Korea is set to reintegrate corporations into its cryptocurrency market. The Financial Services Commission (FSC) has established new protocols allowing listed entities and professional firms to resume trading, effectively terminating the 2017 prohibition.
This move is part of the government’s ambitious “2026 Economic Growth Strategy,” which aims to transform the nation into a premier digital hub by introducing stablecoin laws and paving the way for spot crypto exchange-traded funds (ETFs).
This article explores what led to the ban on corporate trading in South Korea, what the new guidelines facilitate and how this step will transform South Korea’s crypto market. It also examines the risks South Korean regulators are confronting and compares South Korea’s corporate crypto trading policy with those of other countries.
Why corporate crypto trading was banned in South Korea
In 2017, South Korea prohibited institutional involvement in crypto markets due to a surge in retail speculation. Regulators were concerned about the risks of money laundering, market manipulation and threats to financial stability. Authorities restricted corporations and professional investors from participating while allowing retail crypto trading under stringent compliance requirements.
This policy distinctly shaped South Korea’s crypto market. Retail investors eventually dominated trading activity, whereas local institutions remained largely excluded from a rapidly expanding asset class. Gradually, this situation also drove capital flows abroad, with Korean investors and companies pursuing exposure via overseas exchanges and foreign investment products.
On the other hand, developed markets like the US progressively incorporated institutional capital into crypto through regulated futures, custody solutions and, ultimately, spot ETFs. By 2024, institutional participation represented the bulk of trading volumes on many leading global platforms.
What South Korea’s new corporate crypto rules allow
According to new guidelines issued by the Financial Services Commission (FSC), approximately 3,500 organizations are set to gain permission for crypto trading. This group encompasses publicly traded companies along with duly registered professional investment firms.
To begin with, corporate allocations to cryptocurrencies will be limited to no more than 5% of a company’s yearly equity capital. The purpose of this ceiling is to prevent businesses from exposing their balance sheets to undue levels of risk, while authorities monitor the broader implications of institutional involvement on overall market stability.
Permissible investments are confined exclusively to the 20 cryptocurrencies with the highest market capitalization. These cryptocurrencies will be available for trading on South Korea’s five principal regulated crypto exchanges. This channels corporate activity toward major, highly liquid cryptocurrencies like Bitcoin and Ether, thereby sidelining the vast majority of smaller-cap or especially volatile digital assets.
The status of stablecoins such as Tether’s USDt within South Korea’s regulatory framework is still under evaluation. Officials have indicated that stablecoins could undergo a distinct review process. Additional legislation may be introduced concerning payment systems and financial market infrastructure.
Crypto exchanges will need to implement safeguards for institutional orders, including mechanisms such as staggered trade execution and caps on individual order sizes. These legal requirements are intended to reduce abrupt price fluctuations and prevent large orders from disrupting thin order books.
How this fits into South Korea’s broader crypto strategy
The guidelines for corporate cryptocurrency trading in South Korea are not an isolated change. Instead, they form part of a broader regulatory overhaul that includes the upcoming Digital Asset Basic Act, which the National Assembly is scheduled to present in the early months of 2026.
This proposed law aims to consolidate the currently fragmented crypto regulations. It will address key areas such as exchange oversight, token issuance, custody, market conduct and investor protection. Policymakers are examining possible frameworks for stablecoins pegged to the Korean won and regulated spot cryptocurrency ETFs. These steps will further integrate digital assets into traditional financial markets.
These initiatives suggest a shift from crisis-driven restrictions toward structured market participation under formal regulatory supervision.
How corporate access will be transforming South Korea’s crypto market
South Korea’s decision to allow limited corporate participation in cryptocurrency markets is a positive step toward greater institutional integration. This change, along with the upcoming broader regulations, is likely to reshape the country’s crypto landscape over time.
Institutional liquidity and market structure
Enabling corporate participation will transform the dynamics of Korea’s cryptocurrency market. Institutional traders generally operate with longer investment periods, diversified strategies and professional risk management systems. Their arrival may enhance liquidity, narrow bid-ask spreads and reduce the dominance of short-term retail trading activity.
However, the 5% investment limit restricts the volume of funds that can enter crypto from company treasuries in the short term. As a result, the market impact may be gradual rather than immediate.
Treasury strategies and business innovation
In other jurisdictions, various companies have implemented strategies for holding digital assets in their treasuries. They use Bitcoin or similar assets as long-term balance sheet holdings. For instance, Japan’s Metaplanet has drawn worldwide interest by steadily increasing its Bitcoin holdings to build corporate value.
Industry participants in South Korea argue that a stringent investment limit may prevent diverse business models from emerging. Critics say companies should have the freedom to determine their own risk exposure within standard corporate governance and disclosure rules instead of dealing with crypto-specific investment restrictions.
Domestic financial products
Institutional participation in the crypto market will help create new types of financial instruments. These might include cryptocurrency ETFs, structured notes and custody services. For banks and asset managers, corporate trading demand could justify further investment in digital asset infrastructure.
This development could improve South Korea’s ability to compete with other financial centers in Asia, such as Hong Kong and Singapore. These hubs are actively courting digital asset firms and institutional investors.
Comparing South Korea’s corporate crypto policy with other countries
South Korea’s cautious approach to allowing corporate crypto participation differs from the prevailing policies in major markets. In the US and parts of Europe, there are no specific percentage caps on corporate crypto holdings. However, businesses must still follow accounting rules, disclosure requirements and fiduciary responsibilities.
Japan and Hong Kong also allow institutional involvement without imposing fixed caps on balance sheet exposure. Instead, they rely on licensing frameworks, custody regulations and rules governing proper market conduct.
South Korea’s framework reflects a more cautious regulatory stance. It opens the door to crypto assets for corporations while restricting the scale of participation until authorities build greater confidence in the market’s stability.

Risks South Korean regulators are confronting
From the FSC’s viewpoint, the new framework balances market growth with the need to maintain financial stability. The risks that continue to concern regulators include:
Volatility risk, which could harm corporate balance sheets and weaken investor confidenceOperational risk, such as failures in custody arrangements or disruptions at crypto exchangesReputational risk, which arises if companies experience significant losses from speculative crypto trading.
By placing limits on the types of assets allowed and the size of investments, regulators aim to contain systemic exposure while building regulatory experience with institutional crypto participation.
What happens next?
The FSC is expected to release the final version of the guidelines in January or February 2026. Its implementation will be coordinated alongside the Digital Asset Basic Act later in the year. Corporate crypto trading may begin before the end of the year, provided that the legislative schedule stays on course.
Future adjustments may occur if market conditions remain stable and compliance mechanisms demonstrate reliability. Industry associations are likely to push for higher investment limits and a wider range of eligible assets once this initial stage has been completed.
Balancing financial stability with institutional innovation
Lifting the long-standing ban on corporate crypto trading participation represents a significant change in South Korea’s approach to digital assets. After nearly a decade of retail-only participation, institutions are finally being allowed into the domestic South Korean market, though under tight constraints.
Whether this cautious opening evolves into full institutional integration will hinge on market performance, how companies manage risk and how effectively regulators enforce safeguards. It is evident, however, that South Korea no longer views corporate crypto participation as inherently incompatible with financial stability but rather as an activity that can be managed within a structured regulatory framework.

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South Korea is advancing its cryptocurrency market oversight by shifting to AI-driven surveillance. Algorithms now perform the initial detection of suspicious activities instead of relying solely on human investigators.
As crypto trading grows faster, more decentralized and increasingly difficult to monitor manually, regulators are leveraging artificial intelligence to identify irregularities and anomalies more quickly.
Central to this evolution is the Financial Supervisory Service’s (FSS) enhanced Virtual Assets Intelligence System for Trading Analysis (VISTA). This upgrade reflects the recognition that traditional, manual, case-by-case probes can no longer keep pace with today’s dynamic digital asset markets.
This article explains how South Korea’s financial regulators are using upgraded AI systems to automatically detect crypto market manipulation, improve surveillance, analyze trading patterns and plan advanced tools. It also explores faster intervention and alignment of crypto oversight with broader financial markets.
Why South Korea is enhancing its crypto monitoring tools
Crypto markets produce massive volumes of data across exchanges, tokens and timelines. Manipulative tactics such as pump-and-dump schemes, wash trading or spoofing often create sudden bursts that are difficult to detect. Manually identifying suspicious periods in crypto activity has become increasingly challenging at the current market scale. As interconnected trading patterns grow more intricate, automated systems are designed to continuously scan and flag potential issues.
This automation aligns with Korea’s broader effort to strengthen oversight of digital markets, particularly as crypto has become more deeply integrated with retail investors and the overall financial system.

What VISTA does and how the recent upgrade improves it
VISTA serves as the FSS’s primary platform for examining unfair trading in digital assets. In its earlier version, analysts had to specify suspected manipulation time frames before running analyses, which restricted the detection range.
The recent upgrade adds an automated detection algorithm that can independently pinpoint potential manipulation periods without manual input. The system now searches the entire data set, enabling investigators to review suspicious intervals that might otherwise go unnoticed.
According to the regulator, the system successfully identified all known manipulation periods in internal tests using completed investigation cases. It also flagged additional intervals that had been difficult to detect using traditional methods.
How the automated detection operates
Applying a sliding-window grid search approach, the algorithm divides trading data into overlapping time segments of varying durations. It then assesses these segments for anomalies.
The model scans every possible sub-period, identifying patterns associated with manipulation without requiring investigators to determine where misconduct may have occurred. Examples of such patterns include sharp price spikes followed by rapid reversals or unusual volume surges.
Rather than supplanting human oversight, the model prioritizes high-risk segments, enabling teams to focus on critical windows instead of manually reviewing the entire data set.
Upcoming AI enhancements through 2026
The FSS has secured funding for phased AI improvements through 2026. Key planned features include:
Tools designed to identify networks of coordinated trading accounts: These systems aim to detect clusters of accounts acting in sync, a common feature of organized manipulation schemes.Large-scale analysis of trading-related text across thousands of crypto assets: By examining abnormal promotional activity or narrative spikes alongside market data, regulators hope to better understand how attention shocks and price movements interact.Tracing the origin of funds used in manipulation: Linking suspicious trades to funding sources could strengthen enforcement cases and reduce the ability of bad actors to obscure their tracks.
Shift toward proactive intervention in South Korea
South Korea’s AI surveillance push seeks quicker responses. The Financial Services Commission is considering a payment suspension mechanism that could temporarily block transactions linked to suspected manipulation.
This approach aims to prevent gains from being withdrawn or laundered early. While not yet finalized, it suggests a shift by regulators from reactive to preventive enforcement.
Preemptive actions raise important governance questions around thresholds, oversight and the risk of false positives, issues regulators will need to address carefully.
This crypto-focused initiative parallels efforts in conventional capital markets. The Korea Exchange is implementing an AI-based monitoring system to identify stock manipulation earlier. The idea is to create a unified approach across asset classes, combining trading data, behavioral cues and automated risk assessment.
Strengths and limitations of AI surveillance
AI-based systems are adept at spotting repetitive, pattern-driven misconduct such as wash trading or coordinated price spikes. They enhance consistency by flagging suspicious behavior even when it occurs in small or short-lived windows.
For exchanges, AI-driven oversight raises expectations around data quality and monitoring capabilities. It also increases cooperation with regulators. With AI models, surveillance becomes continuous rather than episodic.
Traders and issuers should expect greater scrutiny of subtle manipulative patterns that previously evaded attention. While detection begins algorithmically, real-world penalties remain significant.
But automated surveillance has certain limitations. Cross-venue manipulation, off-platform coordination and subtle narrative engineering remain difficult to detect. AI models also require regular evaluation to avoid bias, drift or the flagging of legitimate activity.
AI tools support, not replace, human investigators.
Shaping of a new enforcement framework
South Korea’s strategy involves AI models built around continuous monitoring, automated prioritization and swifter action. As these systems evolve, balancing efficiency with transparency, due process and accountability will be key.
The implementation of these models will shape not only Korea’s crypto markets but also how other jurisdictions approach regulating digital assets in an era of algorithmic trading and mass participation.

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