South Korea’s Financial Services Commission to roll out crypto regulatory reforms in phases to allow institutional participation in trading

South Korea is preparing to ease restrictions on cryptocurrency trading for institutional investors, indicating a major shift in the country's approach to digital asset regulation. The country's Financial Services Commission (FSC) will roll out regulatory reforms in phases to allow institutional participation in cryptocurrency trading. Currently, South Korean regulations limit cryptocurrency trading to verified retail investors. While institutional investors are not banned outright, banks are prohibited from opening cryptocurrency trading accounts for them. However, the FSC plans to launch these reforms in collaboration with the Digital Asset Commission, and non-profit organizations are likely to be the first to be allowed in. In addition, the FSC is preparing to launch the second phase of the Virtual Asset User Protection Act. This phase will set new guidelines for cryptocurrency listing standards, stablecoins, and the operating behavior of virtual asset exchanges. As part of these efforts, the Financial Supervisory Service of South Korea also intends to amend the Special Financial Transactions Act. These changes will introduce a review system to evaluate the qualifications of cryptocurrency exchange shareholders and include social credit assessments as part of the process. (Yonhap News Agency)