South Korea is about to introduce a new legal framework allowing financial institutions and businesses to invest in crypto legally. This is an important step, marking a significant change in the country’s crypto regulation policy.
Legal Framework for Organizations: Expected Implementation Q3 2025
On March 12, 2025, during a meeting with digital asset experts, the Financial Services Commission of South Korea (FSC) announced plans to issue regulations for institutional crypto investment in Q3 2025. This paves the way for businesses and financial institutions to participate legally in the crypto market, rather than being banned as before.
FSC Vice Chairman Kim So-young emphasized that South Korea needs to quickly establish a legal framework to keep pace with the US and other major economies, which are also pushing for regulations on digital assets.
The upcoming regulations will focus on three main issues:
Establish trading standards for crypto, requiring financial institutions to comply with regulations on information transparency, anti-money laundering (AML), and digital asset reporting.
Enhance cybersecurity for banks and exchanges, ensuring compliance with KYC procedures to limit illegal activities.
Specific regulations for stablecoins and crypto businesses, to be implemented in the second phase of the crypto legal framework.
FSC stated that these regulations will help organizations access crypto in a transparent and legal manner, while ensuring that the South Korean crypto market is more stable.
Government Eases Controls: Charitable Funds & Exchanges Benefit First
Although the complete legal framework will be launched in Q3, the government plans to issue earlier regulations for charitable funds and crypto exchanges in April 2025. This is an important step to test the legalization of crypto in South Korea.
Previously, South Korea banned financial institutions from investing in digital assets, but since the beginning of 2025, the government has started to make changes:
January 2025: FSC announces plans to lift the ban on crypto investment for organizations.
February 2025: FSC allows non-profit organizations such as universities and charitable funds to sell crypto assets to raise capital.
Furthermore, South Korea's new law also postpones crypto taxation until 2027 and abolishes financial investment taxes on stocks, bonds, funds, and derivative products.
South Korea – One of the Most Dynamic Crypto Markets in the World
South Korea has long been one of the largest crypto markets in the world, with trading volumes sometimes surpassing even traditional stock markets. According to the latest statistics, the largest crypto exchange in South Korea is currently ranked 4th in the world in terms of monthly trading volume.
The legalization of crypto investment for organizations will certainly attract more capital inflows from large financial institutions, making the crypto market in this country even more vibrant. This could be a strategic move to help South Korea strengthen its position in the digital asset sector.
Conclusion
With the implementation of the institutional crypto investment legal framework in Q3 2025, South Korea is gradually legalizing the digital asset market in a more professional direction. This move will not only help financial institutions access crypto more easily but may also create a new wave attracting large investment inflows into the market.
However, investors need to be aware that while the legal framework helps stabilize the market, crypto remains a high-risk area. Thorough research before participation is essential.
