The Korea Exchange (KRX) announced on July 2nd that the KOSDAQ listing rules have been changed so that public companies cannot covertly change their original technology businesses to investing in cryptocurrencies. This rule, which restricts one of Asia’s largest equity markets and sends a clear message to the growing trend in companies around the world to invest in Bitcoin or any other form of cryptocurrency as part of their cash treasury strategy, is being put into place by the KRX to stop companies from making these kinds of business changes without any warning or oversight from their investors.
The new rules state that when a company has entered the KOSDAQ through the technology special listing program, and it switches its main business within 5 years from the IPO date, they are now going to be subject to a formal review process for delisting as a result of the business change, which was announced by the KRX on July 2. The amendments became effective on July 2, and any crypto-oriented business changes made will now be included under the exchange’s rules for substantive listing reviews from that date forward.
KOSDAQ tightens tech listings
KRX representatives cited one example: a biotechnology company that utilized the tech-exception procedure to become publicly listed transferred control of its business to an overseas digital asset business and became a crypto investment vehicle.
The KRX announced that when this company made its pivot, it undermined the rationale for listing when it was initially approved. In other words, the KRX concluded that this company had been approved for listing on the basis of a technology characterization and growth outlook as a biotechnology business and that it could no longer depend on those characterizations and expectations for approval based on its current business strategy, because it was now a cryptocurrency investment vehicle.
The tech-exception process was introduced in 2015 to allow firms with strong technology characteristics but limited revenue to access the capital markets. Many successful examples of both KOSDAQ and KRX-listed companies are Alteogen and Rainbow Robotics, which are currently among the largest companies in KOSDAQ measured by market capitalization.
The process allows companies that have passed an evaluation of their technology by authorized evaluation organizations to access the capital markets without meeting the conventional profitability requirements. These companies are provided with a three- to five-year grace period from specific delisting requirements while they invest in commercialization of their technology. Earlier, Cryptopolitan reported that South Korea’s FSC is targeting ‘kimchi coins’ crypto whales in a price manipulation inquiry.
Recent data provided by the Financial Supervisory Service (FSS)indicates that 88.6% of the KOSDAQ 105 companies that qualified for their IPO pricing based on a projection through 2022 to 2024 used the tech-exception process. According to FSS, 79.1% of those companies did not meet their projected revenue, operating profits, and net profit, which leads to regulators’ concerns about the validity of the technology growth assumptions supporting the companies’ respective tech-exception capital increases.
KRX tightens grip on DAT firms
KRX’s announcement has come during an increase in the number of companies that have successfully adopted the DAT (Digital Asset Treasury) concept, which was pioneered by Strategy (formerly MicroStrategy) and replicated by Japan’s Metaplanet, into their business model. Companies such as Bitplanet, which was established in July 2025 following the acquisition of SGA, a KOSDAQ-listed company, now have Bitcoin on their balance sheets and are reportedly planning to acquire even more of this asset class.
Two forces are putting pressure on these DAT firms. The new business-pivot rule penalizes companies that went public for one purpose and shifted to cryptocurrency operations afterward. The updated market capitalization requirement requires KOSDAQ-listed companies to have a minimum $20 billion market capitalization for the last half of 2026 and raise it again to $30 billion from January 2027, Chosun Ilbo reports. If a company is below the applicable minimum for 30 consecutive trading days, it will be designated “managed stocks” and will have 90 days to recover before possibly facing delisting.
The new minimums continue to add pressure to numerous crypto-centric companies already listed in Korea. Bitmax is in violation, having a capitalization of 13.1 billion at the end of June. However, Parataxis Ethereum and Bitplanet are above the minimum for now and below the future minimum scheduled for January, indicating both firms will need to either maintain or grow their capitalizations to remain compliant with the new maximums, Chosun Ilbo reports.
The cumulative impact of these changes significantly reduces the path of the regulatory process for those seeking to implement cryptocurrency treasury strategies. Korean firms that entered the public markets through the technology-special listing process are now subject to regulatory scrutiny regarding their current operations of the technology business for which they were originally listed. They will also begin facing regulatory scrutiny associated with the higher capital requirements they must maintain to continue to be compliant. Collectively, these reforms significantly reduce the options available to these firms for using the technology exception path to ultimately transition to cryptocurrency treasury operations.
South Korea speeds up delistings
In addition to the amended pivot rules, the revised rules will require tech-exception businesses to publicly disclose their plans for enhancing corporate value throughout the grace period; this will replace the previous “no conditions on the exemption from being delisted” rule. KRX is set to add industry-specific listing review criteria for advanced robotics, cybersecurity, and Korean content, and further expand those criteria to incorporate the defense industry in the latter half of 2026, according to Seoul Economic Daily.
KRX has established an independent disclosure system for low price-to-book companies and has shortened the duration of its substantive delisting review process from three stages to two as well as decreased the maximum improvement period from two years to one year, as reported by the Seoul Economic Daily. These changes are intended to expedite decisions regarding underperforming companies as well as to incentivize publicly traded companies to increase shareholder value and implement strong corporate governance.
According to Kim Sung-cheon, KRX team’s head of disclosure systems, at the 30th Anniversary KOSDAQ celebration, “about 50 companies” are projected to be delisted in this market capitalization phase alone. Delisting can begin as soon as August for managed stocks, according to the Seoul Economic Daily.
