Corporate Real-Name Accounts to Be Allowed for Virtual Asset Market
Capital Market Advancement Efforts to Remove the 'Korea Discount'
Support for Short Selling Resumption and Alternative Trading Platforms
Strengthened Stewardship Code and Timely Exit for Marginal Companies
Financial authorities will allow the issuance of corporate real-name accounts, a long-standing demand in the virtual asset industry this year, and accelerate the second phase of legislation to establish a regulatory framework. To remove the label of 'Korea Discount' (undervaluation of the Korean stock market), they will also speed up so-called 'capital market advancement efforts,' such as timely exit of marginal companies and strengthening the implementation of the stewardship code. Immediate efforts will also be made to support the resumption of short selling in March and the launch of alternative trading platforms.
Lee Bok-hyun, Governor of the Financial Supervisory Service (FSS), stated in his opening remarks during the FSS business plan briefing on the morning of the 10th, "We will promote improvements to the regulatory framework for the sound development of the virtual asset market." He explained, "We will support the establishment of additional self-regulations to prevent gaps in user protection, allow the issuance of corporate real-name accounts to expand market participants, and prepare a second-phase bill with global consistency."
This measure is in response to the expected acceleration of institutional adoption of virtual assets worldwide following the inauguration of U.S. President Donald Trump, who styled himself as the 'Crypto President.' Allowing corporate accounts will not only facilitate market entry for small and new exchanges but also enable domestic companies and institutions to legally invest in virtual assets, thereby expanding the market.
However, concerns about illegal fund flows such as money laundering remain significant, making it essential for financial authorities to establish a systematic regulatory framework. To this end, the FSS plans to focus on the second phase of legislation for a virtual asset regulatory system that harmonizes regulation and innovation. They will study overseas cases for domestic application and encourage additional industry self-regulations such as business conduct rules for advertising and marketing, and voluntary disclosures by operators. Governor Lee added, "We will also ensure a thorough unfair trading response system by enhancing the FSS’s own investigation system and strengthening market surveillance functions of exchanges."
Alongside this, the FSS will also accelerate capital market advancement tasks to ensure the capital market’s fundamental role in increasing national wealth operates smoothly. First, ahead of the resumption of short selling at the end of March, they plan to complete the establishment of a computerized system to prevent illegal short selling within the first quarter and conduct focused investigations on detected violations. They will also actively support the stable settlement of alternative trading platforms launching in March.
Additionally, to enable the timely exit of marginal companies, related systems will be improved, and the implementation of the stewardship code by asset management firms will be strengthened through voting rights comparisons. This is also an extension of the 'IPO and delisting system improvement plan' announced by financial authorities last month. They will also consider measures to improve retirement pension returns linked to the capital market.
An FSS official explained, "We plan to devise multifaceted improvement measures and execute them consistently and swiftly until the term 'Korea Discount' disappears." As of the end of 2023, the price-to-book ratio (PBR) of the Korean stock market stands at 1.05, significantly lower than the emerging market average of 1.61.
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