South Korea’s financial regulator plans to gradually ease restrictions on crypto trading by institutional investors and allow institutional investors access to the crypto market. Non-profit organizations are at the top of the list of organizations allowed to trade in cryptocurrencies.
The Korean Financial Services Commission will gradually lift restrictions on virtual currency trading following the passage of the Virtual Asset User Protection Act in July 2024, which aims to curb unfair trade practices at the organizational level. I plan to.
South Korea’s FSC Secretary-General Kwon Dae-young aims to keep pace with global regulatory practices that have moved from excessive restrictions to more flexible regulations in recent months, particularly in Asia.
Virtual Asset User Protection Act
The Virtual Asset User Protection Act is a response to black swan events like the collapse of exchanges such as FTX and the Terra network crash caused by negligence or unethical conduct.
The FTX crash resulted in losses of $8 billion to $10 billion, much of it attributable to institutional investors.
To be clear, cryptocurrency trading is not prohibited in South Korea, but banks have been instructed to restrict trading by institutional investors. Retail traders can continue to access the market through their regulated local exchanges.
The new rules provide a framework to prevent large-scale delisting of digital assets by standardizing listing and delisting criteria.
move forward
The FSC plans to gradually allow trading by institutional investors and eventually expand its regulations to include provisions for the listing of stablecoins and tokens.
Kwon Dae-young said, “We need to discuss how to create listing standards, what to do about stable coins, and how to create a code of conduct for crypto asset exchanges.”
