FSC to Allow Institutional Investors in South Korea to Trade Virtual Assets in 2024

South Korea's Financial Services Commission (FSC) will allow selected institutional investors to open virtual asset trading accounts starting in the second half of the year, enabling around 3,500 corporate entities, including listed companies, to participate in a pilot test. This decision responds to growing demand from institutional investors to engage in blockchain and cryptocurrency-related businesses, positioning South Korea alongside other nations integrating virtual assets into their financial systems.

The FSC aims to balance innovation with risk management by introducing safeguards such as transaction guidelines for banks to verify the purpose and origin of funds. Virtual asset exchanges will be encouraged to adopt third-party custody services and enhance investor disclosures. Detailed screenings by banks and exchanges will ensure that only qualified investors participate, with financial companies initially excluded to protect the broader financial system. Future participation of non-qualified corporations will depend on the market's development and pilot outcomes.