South Korea’s financial regulators have launched a two-pronged offensive to tighten oversight of the digital asset sector, targeting both exchange operations and publicly listed companies that covertly adopt cryptocurrency treasury strategies.
Financial Supervisory Service (FSS) Governor Lee Chan-jin on July 2 urged chief executives of virtual asset service providers to establish comprehensive internal control systems. The call followed a recent erroneous Bitcoin payout at a local exchange, where a system glitch caused a user to receive a significantly larger sum than intended. During a meeting with industry leaders, Lee stressed that weak internal controls not only risk operational failures but also erode broader market confidence. Despite stagnation in the first half of 2026, the FSS noted that the user base continues to expand, driven by stablecoin adoption, blockchain-traditional finance convergence, and progress on an asset tokenization regulatory framework. The regulator warned it will monitor compliance closely and may impose stricter penalties if voluntary improvements are not made.
The same day, the Korea Exchange (KRX) announced amended KOSDAQ listing rules to prevent technology-special listing companies from secretly pivoting to cryptocurrency investment vehicles. Under the new rule, any firm that entered the KOSDAQ via the tech-exception process and switches its main business within five years of its IPO will face a formal delisting review. A KRX representative cited a biotech firm that used the tech-exception path to list, then handed control to an overseas digital asset business, effectively becoming a crypto investment vehicle—undermining its original listing rationale. The tech-exception program, introduced in 2015, allows firms with strong technology but limited revenue to go public without meeting standard profitability requirements.
The KRX also updated market capitalization requirements: KOSDAQ-listed companies must have a minimum of $20 billion (₩20 trillion) market cap for the second half of 2026, rising to $30 billion from January 2027. Companies falling below the threshold for 30 consecutive trading days will be designated “managed stocks” and face delisting. Crypto-centric firms like Bitmax already fall short, while Parataxis Ethereum and Bitplanet are above the current minimum but below the future one. Additionally, tech-exception firms must now publicly disclose value-enhancement plans during their grace period, and the delisting review process has been accelerated, with about 50 companies expected to be delisted in this capitalization phase alone. The cumulative effect significantly curtails the ability of Korean firms to use the tech-exception route to transition to cryptocurrency treasury operations.
