Digital Asset Industry Facing a New Era of Corporate Investment… "Key Issue for Coin Exchanges is Securing Real-Name Account Partnerships"

# Regulatory Guidelines for Corporate Investors Signal Potential Shift in Korean Digital Asset Market The financial authorities are set to release comprehensive guidelines for corporate investors interested in the digital asset (cryptocurrency) market, raising speculation about whether cryptocurrency exchanges that cannot handle Korean won (KRW) deposits and withdrawals will begin targeting corporate clients. # Detailed Guidelines to Address Corporate Participation According to industry sources, the Financial Services Commission (FSC) plans to issue detailed guidelines next month concerning corporate investment in digital assets. These guidelines will include specifics on eligible corporations, transaction procedures, methods, and disclosure requirements. Additionally, related agencies, including banks, are reported to be preparing practical guidelines on accounting and cashing out digital assets for corporations. This move aims to reduce uncertainties and establish clear standards for corporate digital asset investments. # Market Impact and Current Disparities These regulatory changes are expected to significantly impact the domestic digital asset market, which currently shows stark disparities between KRW exchanges and cryptocurrency-only exchanges. Data from the Financial Intelligence Unit (FIU) indicates that KRW exchange trading volume reached approximately 43 trillion won (99%) in the second half of last year, while cryptocurrency exchanges saw a mere 460 billion won (1%). Furthermore, KRW market user accounts numbered 17.9 million, compared to only 260,000 for cryptocurrency markets. Several factors have led to the marginalization of cryptocurrency exchanges. Unlike KRW exchanges, they do not support direct KRW deposits and withdrawals, inconveniencing users. Additionally, complex transaction procedures and the lack of distinct advantages have deterred investors. Limited liquidity and high volatility of listed coins have further discouraged participation. Consequently, many cryptocurrency exchanges have suffered operational losses, with some even ceasing operations. # Potential Changes with Corporate Investment Should corporate investors enter the market actively, the landscape could change substantially. Corporates and institutional clients typically engage in larger, more long-term transactions compared to individual investors. Yoon-Sung Cho, a research analyst at Tiger Research, stated, “It’s challenging for most domestic cryptocurrency exchanges to compete against KRW exchanges in terms of retail trading volume. However, as a new market opens for corporate clients, cryptocurrency exchanges are likely to adapt proactively.” Dong-Hyuk Kim, a researcher at Dispread, added, “Currently, domestic exchanges predominantly cater to individual investors. The influx of corporates and institutional investors handling large-scale funds would increase liquidity and profitability.” He further noted that exchanges are highly likely to actively pursue corporate clients. A representative from a domestic exchange mentioned, “If corporate trading becomes permissible, market liquidity will significantly improve. Incoming institutional funds could also mitigate volatility issues.” # Learning from Global Leaders The world’s largest exchange, Binance, initially operated as a cryptocurrency-only marketplace without fiat currency support, rapidly growing its global user base. This indicates that cryptocurrency exchanges targeting corporate clients with differentiated strategies could secure new growth drivers. Hyo-Bong Kim, a lawyer at Bae, Kim & Lee LLC, pointed out that some domestic cryptocurrency exchanges also apply OTC (over-the-counter) trading methods. He noted, “Corporate clients may prefer OTC transactions at cryptocurrency exchanges over KRW exchanges to avoid market price impact.” # Remaining Challenges and Strategic Needs Despite potential regulatory changes, cryptocurrency exchanges may still struggle to compete with KRW exchanges. A domestic cryptocurrency exchange representative emphasized, “Whether retail or corporate, it’s difficult to attract clients without real-name accounts. Cryptocurrency exchanges must address this issue.” The primary challenge lies in the lack of direct fiat currency transactions at cryptocurrency exchanges. Researcher Yoon-Sung Cho commented, “Corporate investment activities typically involve traditional asset classes like fiat currencies, but cryptocurrency exchanges are limited to crypto-to-crypto transactions. Therefore, they must clearly define their capabilities and limitations.” He suggested, “To attract corporate clients, developing dedicated services such as corporate staking, lending, and custody is essential, requiring in-depth consideration.”