At the beginning of this year, the Financial Services Commission (the “FSC”) (i) disclosed its intention to embark on a Phase 2 legislative initiative following the enforcement of the Act on the Protection of Virtual Asset Users (the “Virtual Asset Users Protection Act”), and (ii) declared a policy to enable corporations to participate in the virtual asset market in phases.

Recently, the global virtual asset market has undergone unprecedented rapid changes, accompanied by a blend of expectations and anxiety. The European Union (the “EU”) has been implementing the Markets in Crypto-Assets Regulation (the “MiCA”) since the end of last year, which covers regulations on the entry of players and business activities, as well as virtual asset trading and disclosure. Earlier this year, President Trump signed an executive order titled “Strengthening American Leadership in Digital Financial Technology.” The main agenda of the order is to establish a working group dedicated to the digital asset market, with the aim of clarifying regulations on digital financial technology and reinforcing US leadership in digital assets. In this regard, Korea needs to progress from the current Virtual Asset Users Protection Act, which primarily centers on safeguarding user assets and regulating unfair trade practices, and engage in the broader Phase 2 legislative initiative to establish more transparent regulations.

Moreover, although corporations have, in principle, been restricted from trading virtual assets by government policy in Korea since 2017, there has been a growing demand for these restrictions to be lifted. This increasing demand is attributable to a shift in the market landscape, which includes the fact that major regions such as the US and EU permit extensive corporate participation in the market, coupled with a surge in interest among Korean companies in exploring new opportunities in blockchain-related businesses.

With its 2025 business plan and by holding the second and third meetings of the Virtual Asset Committee, the FSC (i) embarked on the Phase 2 legislative initiative, and (ii) set policy directions, including enabling corporations to participate in the virtual asset market in phases. The specific details are as follows.
 

• Regulations on entry and business activities: A review of international legislation concerning virtual asset businesses (trading/brokerage, custody/management, advisory and appraisal) was conducted. Furthermore, discussions highlighted the necessity of new regulations to address unsound business conduct and establish internal control obligations. These measures aim to safeguard users and prevent conflicts of interest, among other objectives.
   

• Regulations on listing and disclosure: Developing a transparent listing and disclosure framework is vital for the protection of users. There have been discussions about (i) the need to improve the effective implementation of “transaction support (listing),” which is currently regulated by the self-regulatory model rules, and (ii) the need to introduce a regular disclosure system, such as “business reports,” and a non-periodic disclosure system, such as the “system of disclosing material matters,” akin to disclosures in the capital market, among other issues.
   

• Regulations on stablecoins: A review was conducted covering topics such as the recent global trends regarding stablecoins and the regulatory advancements in each country. In particular, there have been discussions on recent major global regulatory trends, which entail imposing strict management obligations on stablecoin issuers regarding reserve assets and explicitly guaranteeing users’ right to claim reimbursement to ensure user protection.
   

• The FSC plans to allow corporate entities to open real-name accounts in a phased and gradual manner to the extent that it does not undermine the protection of virtual asset users and market stability.
   

• Phase 1: Law enforcement agencies will be immediately allowed to open corporate accounts for the purpose of cashing out, whereas non-profit corporations and virtual asset exchanges will be allowed to do so starting from the second quarter of this year. That said, since sales by virtual asset exchanges resemble proprietary trading, there is a risk of conflicts of interest with users, depending on the timing and size of trades. In light of this risk, accounts will be issued sequentially following the development of shared guidelines for virtual asset exchanges.
   

• Phase 2: The decision to allow the issuance of corporate accounts for professional investors who are not financial companies but are publicly listed corporations (approximately 2,500 entities) and corporations registered as professional investors (approximately 1,000 entities) will be made after the second half of this year, following a detailed review by banks and exchanges. However, with the expansion of virtual asset trading requiring enhanced anti-money laundering frameworks, corporate accounts will be issued only after supplementary guidelines and monitoring measures for anti-money laundering are in place.
   

• Phase 3: Subject to the Phase 2 legislative initiative and revisions of relevant systems, including those relating to foreign exchange and taxation, the FSC plans to discuss allowing general corporate entities to participate in the virtual asset market in the mid to long-term.
   

• In addition, the FSC will amend the Act on Reporting and Using Specified Financial Transaction Information this year, introducing a system to review the eligibility of major shareholders in virtual asset businesses, which will incorporate social credit requirements. Furthermore, to protect virtual asset users, the FSC intends to bolster virtual asset user protection by refining self-regulatory measures (e.g., enhancing memecoin review standards and reinforcing transaction support and employee internal control procedures) and by increasing investigations of unfair trading practices through the use of advanced forensic equipment.
   

The FSC will organize a task force and subcommittees of relevant agencies to review the details of the Phase 2 legislative initiative for each major task. For the issues that are reviewed (review completed), a specific Phase 2 bill will be prepared in the second half of the year, following discussions with the Virtual Asset Committee.

In addition, to address corporate participation in the virtual asset market, a joint task force of private and public sectors will be formed by the Financial Supervisory Service, the Korea Federation of Banks, the Digital Asset eXchange Alliance (“DAXA”), non-profit corporations and virtual asset exchanges. This task force will develop tailored guidelines for various types of corporations. Specifically, by the first half of this year, the FSC intends to establish and announce internal control standards for virtual assets applicable to non-profit corporations, along with shared guidelines for the sales by virtual asset exchanges. In the latter half of the year, the FSC plans to prepare and release supplementary guidelines and monitoring measures aimed at anti-money laundering for corporations engaged in virtual asset trading.

With such significant changes in virtual asset policies on the horizon this year, the virtual asset industry, as well as corporations aspiring to trade virtual assets, should pay close attention to new regulations and prepare themselves to swiftly align with the evolving regulatory environment.

[Korean Version]