South Korea Lifts Ban on Institutional Crypto Trading

South Korea is set to lift its ban on institutional crypto trading. Through 2025, several institutions, including non-profits, universities, law enforcement agencies, and listed companies, will be allowed to trade crypto assets like Bitcoin and Ethereum.

This decision follows years of strict regulations aimed at controlling speculation and managing money laundering risks in the crypto market.

Historical Background on Crypto Regulations

South Korea’s government has long enforced strict regulations on crypto trading. In 2017, the Financial Services Commission (FSC) banned Initial Coin Offerings (ICOs) due to concerns about speculative investments. This was followed by a ban on financial institutions offering crypto services and the implementation of a real-name trading system to ensure transaction accountability. By 2018, Anti-Money Laundering (AML) regulations were established, paving the way for more detailed oversight of crypto activities.

AML Checks and the Digital Asset Basic Act

In 2019, banks were required to perform AML checks on crypto exchanges. The following year, the Special Financial Transactions Act was enacted, mandating that exchanges comply with AML standards and utilize a real-name bank account system.

In 2021, staking was banned, and the FSC increased monitoring of exchanges. The collapse of the Terra-Luna project in 2022 further tightened regulations, resulting in the formulation of the Digital Asset Basic Act (DABA) in 2023.

Two-Phase Plan to Ease Crypto Ban

On February 13, 2025, the South Korean Financial Services Commission announced a two-phase rollout allowing specific institutional entities to trade crypto. These entities will be permitted to use virtual asset exchanges for transactions involving approved crypto assets like Bitcoin and Ethereum.

The second phase, anticipated to commence in the latter half of 2025, will include approximately 3,500 listed companies. These companies and professional investors registered under South Korea’s Capital Market Act will have the ability to buy and sell digital assets.

Global Trend Drives South Korea’s Crypto Policy Shift

The decision to lift the institutional crypto trading ban aligns with a global trend as other countries incorporate corporations into the digital asset market. The South Korean government noted this trend in its press release, underscoring the growing demand for blockchain-related businesses both locally and internationally.

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