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Korea to approve corporate crypto accounts, but financial firms excluded

Published: 13 Feb. 2025, 18:27

PARK EUN-JEE
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Financial Services Commission Vice Chairman Kim So-young speaks about the regulator's permission for the opening of bank accounts for cryptocurrency transactions on Feb. 13 at the government complex in central Seoul. [FINANCIAL SERVICES COMMISSION]

The country’s financial regulator will allow the opening of bank accounts for transactions of cryptocurrencies this year by different entities including corporations and law enforcement agencies.

“We’ve reached the consensus on the permission of corporate participation in the cryptocurrency market, considering overseas cases where the virtual asset ecosystem has been primarily developed around corporations,” said Financial Services Commission (FSC) Vice Chairman Kim So-young, mentioning other factors like the need to align with global regulatory system.

The FSC, however, will still ban financial companies from participating in the virtual asset market, which means their listing of virtual asset-based exchange-traded funds (ETFs) will also be prohibited for the time being.

Some branches of law enforcement agencies, such as prosecution and the National Tax Service, have already been allowed to sell seized crypto assets since December of last year, but the regulator will expand the scope of agencies' entitlement to the transaction.

Starting in the second quarter, nonprofit organizations, such as universities and charities, will be allowed to open bank accounts for the purpose of selling such assets.

The allowed charities will be those certified by government agencies including the Finance Ministry and the National Tax Service.

Some 2,500 listed firms and licensed investors will be allowed to trade crypto assets as early as the second half of this year.

But the FSC will initiate the trading after it sets up guidelines and monitoring systems designed to prevent money laundering.

Acknowledging potential risks linked with cryptocurrency transactions, the FSC will apply strict screening systems when banks and exchanges provide crypto accounts.

An example of the screening involves the granting of transaction approval only if the transaction purpose and source of funds are verified, according to a statement by the FSC.

Financial companies, such as banks and brokerage houses, will be banned from selling or buying crypto assets, as the FSC needs to further assess potential risks, when they participate in the market.

Consequently, they cannot sell cryptocurrency ETFs as they are required to hold virtual assets for the sale of such financial products.

BY PARK EUN-JEE, YONHAP [[email protected]]