Korea Redefines Regulatory Framework with 5% Limit for Crypto Investments

South Korea’s Financial Services Commission is proposing a major step forward in its strategy for regulating digital assets: a cap on crypto investments of up to 5% of registered capital for publicly traded companies. The move marks a significant turning point in the easing of institutional restrictions that Korea has long maintained.

According to reports from local media outlets, including Seoul Economic Daily, Korea’s financial authorities are currently working on finalizing these trading guidelines, with a view to modernizing its digital asset ecosystem. The timeline is moving fast, with live trading scheduled to begin this year.

The new negotiating guidelines in Korea

Eligible organizations would be allowed to allocate up to 5% of their equity annually to digital investments, restricting this portfolio to the top 20 cryptocurrencies by market capitalization. The question of the inclusion of US dollar-denominated stablecoins, including USDT, is still under discussion among regulators.

This proposal is part of a broader move by Korea to eliminate what was effectively an unspoken ban on companies’ participation in digital assets. Since mid-2025, the country has gradually relaxed its rules, including allowing non-profit organizations and cryptocurrency exchanges to carry out certain transactions. The current progression with the guidelines for listed companies and professional investors consolidates this trend.

An investment universe limited to the top 20 digital assets

The regulatory framework proposed by the Korean authorities reflects a balanced philosophy between openness and prudence. Restricted access to the top 20 tokens aims to concentrate capital flows to the most liquid and least volatile assets in the crypto ecosystem.

Market analysts anticipate a natural concentration of investments in Bitcoin and, to a lesser extent, Ethereum, even though the theoretical investable universe includes a much wider range. Forecasts suggest a limited spillover into smaller digital assets, reflecting institutional investors’ natural preference for high-liquidity positions.

Safeguards and market risk management

Faced with the expected increase in corporate participation, regulators in Korea plan to implement sophisticated safeguards. These safeguards would include fragmented trading restrictions and price limits, designed to mitigate potential impacts on market volatility.

The 5% limit itself is a safety net to reduce systemic exposure to companies’ balance sheets. This careful balance between restriction and facilitation reflects lessons learned from previous regulatory relaxations in other jurisdictions and Korea’s gradual experience with digital assets.

Current trends and performance of crypto-assets

In today’s markets, major digital assets are seeing widespread declines. Bitcoin is contributing to about $85.26 thousand with a 4.96% decline over 24 hours, while Ethereum is down 5.55% at $2.84 thousand. At the same time, Dogecoin is down 5.69%, trading at around 0.12 US dollars.

Dogecoin in particular has broken through key technical support at $0.1218 on significant volume, turning this level into a short-term resistance zone. Traders are closely following the area between $0.115 and $0.12 as a critical decision level for the next price moves.

Future outlook and regulatory developments in Korea

Beyond the current trading guidelines, market participants are also watching the Digital Asset Basic Act, expected in the first quarter, which could establish definitive rules regarding stablecoins and digital asset exchange-traded funds (ETFs).

Korea’s gradually pro-crypto approach contrasts with its years of restriction, positioning the country as a potentially significant player in institutional adoption in Asia. This regulatory transformation could open up a new growth avenue for digital financial services and blockchain infrastructure.