South Korea's FSC rejects the three-rule: no definitive decisions on capital in digital assets

Recently, South Korea’s Financial Services Commission (FSC) publicly denied the rumors circulating about the imposition of a three-tier rule on corporate investments in digital assets. The regulatory body clarified that there is still no final stance regarding investment limits for businesses or the transparency standards that should be applied in this emerging sector.

The emergence of these rumors reflects the growing concern of the Korean regulatory sector over the increase in corporate holdings in the virtual asset market. Many corporations have begun to consider cryptocurrency investments as part of their portfolio diversification strategies, prompting regulators to evaluate whether more specific regulatory frameworks need to be established.

The FSC Maintains a Cautious Approach Toward Digital Assets

South Korean financial authorities have historically expressed a cautious stance toward corporate investments in the sector. This attitude responds to the need to protect both companies and the overall market from potential volatility and risks inherent to virtual assets. By rejecting a premature three-tier rule, the FSC aims to avoid restrictions that could be excessively limiting for the business sector.

The decision to keep deliberations open also reflects the recognition that the digital asset market continues to evolve rapidly, making any premature regulation potentially obsolete in the short term.

Ongoing Negotiations in Public-Private Table

Currently, a working group composed of representatives from the public sector and private actors in the virtual asset market continues to develop proposals on how professional investment firms should participate. These negotiation tables seek to find a balance between regulatory protection and sector development.

The deliberations are still in the early stages, with no defined schedule set for presenting conclusions. Participants in these negotiations include both financial system supervisors and executives from firms specializing in virtual asset management, promising a constructive dialogue between both sides.

The FSC’s clarification regarding the absence of final decisions on the three-tier rule is crucial to maintaining market confidence. As companies evaluate their investment possibilities in digital assets, knowing the true state of regulatory negotiations allows for more strategic planning and reduces uncertainty in the sector.