Authors: Ryan Yoon, Elsa
Summary of Key Points
From Liquidity Export to Industrial Ecosystem: In the first quarter of 2025, the Korean Web3 market is experiencing a turning point. This market, once viewed as a 'liquidity export' for global projects, is transforming into a structured self-sustaining industrial ecosystem.
The impact of relaxed regulations on corporate accounts: As part of the Financial Services Commission's roadmap, institutional entities are gradually being permitted to trade cryptocurrencies through corporate accounts.
Ecosystem building led by global projects: Projects like Avalanche, TON, Ripple, and Solana are actively establishing a long-term foundation in Korea. Their activities have gone beyond marketing efforts, focusing on building developer communities and hosting hackathons.
1. The Korean Web3 market in the first quarter of 2025: still just a liquidity export?
Despite active retail participation and ample liquidity, the development of institutional infrastructure in the Korean Web3 market has made limited progress. Regulatory efforts prioritize investor protection over ecosystem development, delaying broader industry growth.
The two main obstacles are: 1) the association restrictions between corporate accounts and cryptocurrency exchanges; 2) the high entry barriers for obtaining a virtual asset service provider (VASP) license. Companies are unable to connect their corporate accounts to local exchanges, making it legally unfeasible to convert cryptocurrencies acquired through operations into fiat currency via Korean financial institutions. While some companies have turned to overseas entities as a stopgap, this approach carries regulatory risks and cannot provide a sustainable long-term solution.
The high entry barriers for VASP registration have also become a major constraint on market development. Although small-scale operations may technically operate without registration, large projects continue to face legal and regulatory uncertainties.
These institutional constraints, combined with investor activities that far exceed local ecosystem maturity, have led some projects to view Korea primarily as a customer acquisition channel. In this context, the external perception of the Korean market as simply a 'liquidity export' becomes difficult to refute.
Market developments in the first quarter of 2025 indicate that Korea has the potential to shift from a speculation-driven market to an industry revitalization-oriented market. Recent regulatory improvements (such as allowing corporate accounts to trade cryptocurrencies) signify substantial progress in structural reform. Beneath the surface, global projects are steadily building a local ecosystem with the support of an expanding builder community and new initiatives.
The Korean Web3 market is at a critical turning point. As the ecosystem matures beyond an investor-driven development model, and with dual support from institutional readiness and sustained investment interest, it is expected to generate greater long-term value.
2. Institutional Progress: Allowing corporate accounts to trade cryptocurrencies
In Korea, restrictions on cryptocurrency trading by legal entities began with the 'Park Sang-ki Ban' in 2017. The policy, led by then Minister of Justice Park Sang-ki, effectively prohibited financial institutions and companies from participating in cryptocurrency trading. Although the guidelines have expired, this practice has continued, resulting in a dual-track system where individuals can trade within the regulatory framework while corporate entities face restrictions on financing activities.
Source: Tiger Research
To address these limitations, the Financial Services Commission (FSC) officially announced on February 13, 2025, a roadmap for corporate participation in the cryptocurrency market. The core highlight of this roadmap is the phased lifting of the seven-year ban on corporate cryptocurrency trading.
Phase 1 (starting Q2 2025): Open accounts for law enforcement agencies, non-profit organizations, and cryptocurrency exchanges, limited to asset liquidation purposes
Phase 2 (starting in the second half of 2025): Allow trading by professional investors such as public companies and registered investment companies
Phase 3 (mid to long term): Fully open the market to ordinary enterprises
In Phase 1, from November 2024, law enforcement agencies such as prosecutors, tax authorities, and local governments have begun to gain account access for liquidating seized cryptocurrencies. Non-profit organizations and exchanges are expected to follow in the second quarter of 2025. Phase 2 marks a more significant shift. Starting in the second half of 2025, public companies and professional investment firms will be allowed to engage in cryptocurrency trading for investment and treasury management purposes.
However, most Web3 projects fall under the third phase of ordinary enterprises. To qualify for Phase 2, companies must maintain a financial investment product balance of at least 10 billion won (approximately 7 million USD) under the Capital Markets Act, while external audit entities require a balance of 5 billion won (approximately 3.5 million USD)—a threshold that most Web3 companies cannot meet. Therefore, the majority of Web3 projects cannot immediately benefit from the new regulations. Nevertheless, the roadmap still signifies the gradual easing of regulatory constraints. As Phase 3 progresses, direct market access for Web3-native enterprises will become increasingly feasible.
2.1. The positive significance of allowing corporate trading accounts
Establishing a legal foundation for Korean companies to engage in Web3 business
Enhancing market stability through institutional investors with structured risk management and long-term strategies
Promoting diversification of financial services, including cryptocurrency funds and custody services
Web3 projects often use native tokens to exchange services and resources. However, in Korea, companies previously had almost no legal means to liquidate acquired crypto assets. The new policy establishes a critical entry point for companies to operate compliantly, promoting the normalization of crypto-related business activities.
This progress is expected to further expand in the second half of the year, when trading permissions will extend to public companies and registered institutional investors. Unlike retail investors, corporate investors tend to adopt structured risk management frameworks and long-term investment strategies. Their entry into the market is expected to reduce volatility and support the sustainable development of the Korean Web3 ecosystem. Additionally, broader corporate participation may improve the ongoing inefficiencies of the local market—most notably the 'kimchi premium.'
The increase in institutional participants is also expected to broaden the range of crypto-related financial services. Asset management companies may launch cryptocurrency funds or acquire custody service providers to offer comprehensive solutions. Financial technology companies may develop corporate treasury tools that support cryptocurrency account management. These developments will help expand the Korean Web3 industry by strengthening supporting service infrastructure and attracting more traditional financial institutions.
2.2. Potential Risks of Allowing Corporate Crypto Accounts
Phased deregulation may lead to supply and demand imbalances, creating downward pressure on prices
As public companies and institutional investors enter the market, the government's efforts to ensure taxation are expected to strengthen
Conservative risk management by institutional investors may lead to concentrated holdings in Bitcoin, raising concerns about declining activity in the altcoin market
The introduction of corporate accounts may have a substantial impact on retail participants. From a market dynamics perspective, phased deregulation may lead to an imbalance of buying and selling pressures. According to the FSC's corporate roadmap, regulators believe that the risk of corporate selling activities is relatively low. Therefore, by the end of 2025, only selling-side liquidity may enter the market, leading to downward price pressure. While the anticipated selling volume may remain moderate relative to the overall market, low-liquidity tokens may face greater volatility.
At the regulatory level, when public companies and institutional investors fully enter the market, the government's efforts to ensure taxation are expected to strengthen. Although the taxation of cryptocurrencies has been postponed to January 1, 2027, the presidential election on June 3, 2025, may change the policy direction, which is worth close attention.
In terms of investment behavior, corporate capital may concentrate in Bitcoin. As evidenced by US Strategy (formerly MicroStrategy) and Japan's Metaplanet, institutional investors tend to allocate to large-cap stable assets due to conservative risk management. This may lead to substantial capital inflows into Bitcoin or impact the altcoin market—where Korean retail investors have traditionally been highly active. As a result, the altcoin market may face declining interest and liquidity in the medium to short term.
3. Industrial Transformation: Strategic Layout of Global Web3 Projects
Following the US and China, Korea has become a core strategic market for global Web3 projects. In response, numerous international teams are actively recruiting Korean talent and establishing substantive collaborations, demonstrating a strategic shift from superficial marketing to building a sustainable, builder-led local ecosystem. This long-term layout not only supports the growth of individual projects but also enhances the overall competitiveness of the Korean Web3 industry.
3.1. Project Support: Guiding Industry Direction by Supporting Mature Teams
Source: Avalanche Korea X
Avalanche and the TON Foundation are global project exemplars that build ecosystems by directly supporting local teams in Korea. Following a successful collaboration with (MapleStory), Avalanche has expanded cooperation with small and medium-sized projects in Korea. The teams hold quarterly demo days to showcase available products and actively attract users, forming a feedback loop that provides substantial value to projects and participants.
The TON Foundation has taken a more structured approach by launching the 'TON Society Korea Builder' program. This initiative includes a formal project database, systematic support framework, and expanded network access to strengthen the local TON ecosystem in a scalable manner.
These ecological support strategies have produced tangible results that go beyond short-term exposure or participation metrics. Verified local developers have gained a more stable growth foundation, and their success stories provide clear guidance for newcomers. At the same time, these initiatives lay the groundwork for the international expansion of Korean projects.
3.2. Hackathons: Cultivating Korean builders and strengthening market potential
Hackathons hosted by XRPL Korea (Ripple) and Superteam Korea (Solana) have gone beyond single-event scope and become key turning points for the Korean Web3 ecosystem. In March, Ripple held a two-day 'DE-BUTHON 2025,' attracting 24 teams and 203 participants. Superteam Korea partnered with 22 global partners to host the 'SEOULANA HACKATHON,' with participation exceeding 300.
The scale and success of these events help to reshape the perception of Korea as a speculation-driven market. The high participation in large hackathons reflects the existence of a strong builder ecosystem. These events have now become strategic launch platforms—providing builders with clear market entry paths and bridging the gap between prototype development and actual deployment.
As of the first quarter of 2025, driven by global network-dominated ecosystem building initiatives (rather than merely capital inflows), the Korean Web3 industry is beginning to show quantifiable progress. Strengthened collaboration with mature participants, along with developer support programs, is cultivating a new generation of local builders.
These developments mark the entry of the Korean Web3 sector into a new phase of dynamism. On this basis, Korean projects are expected to deliver substantial innovations to the global stage in the coming years.
4. From Investment-Driven to Industry-Driven: The Turning Point of the Korean Web3 Market
In the first quarter of 2025, the Korean Web3 market is undergoing a key transformation—from an investment-driven environment to a mature industrial ecosystem. Regulatory progress, including the phased opening of corporate cryptocurrency trading accounts, lays the foundation for structured market participation. At the same time, the ongoing ecosystem building efforts of global Web3 projects are helping the Korean market achieve long-term growth positioning.
Another important milestone is the successful completion of the first retail user real-world transaction of the Bank of Korea's digital currency (CBDC) 'Han River Project.' During the same period, major commercial banks in Korea began exploring the issuance of a Korean won stablecoin in early April. The Bank of Korea has also indicated that it will play a more active role in future regulatory legislation.
In terms of infrastructure, ongoing discussions about a 'one exchange - multiple banks' system signal potential structural breakthroughs. Under this model, cryptocurrency exchanges will no longer be limited to a single banking partner and can connect with multiple commercial banks. This move is expected to significantly enhance market flexibility and user access.
Overall, these developments clearly showcase the evolution of the Korean Web3 field toward a sustainable industry ecosystem. After years of regulatory constraints and structural inefficiencies, Korea is entering a new phase where policy collaboration, institutional participation, and signs of industry-level growth are emerging.
