tl;dr
South Korea is undergoing major cryptocurrency regulatory changes, including enhanced Know Your Customer (KYC) requirements for exchanges and banks, plans to lift the ban on institutional crypto investments by Q3 2025, and pending legislation on tokenized securities. These reforms aim to increase ma...
South Korea is enacting sweeping cryptocurrency regulatory reforms designed to boost transparency, security, and institutional participation. Key measures include enhanced Know Your Customer (KYC) requirements for exchanges and banks, reflecting recent findings of up to 600,000 potential violations at major platforms like Upbit.
The Financial Services Commission (FSC) is at the forefront, aiming to facilitate the entry of institutional investors by lifting the seven-year ban on their cryptocurrency investments by Q3 2025. This policy shift is expected to open new avenues for listed companies and professional investors to trade digital assets.
Complementing these changes, the South Korean National Assembly is reviewing legislation to create a legal framework for tokenized securities—blockchain-based financial instruments that could bridge crypto with traditional finance once approved post-presidential election.
In a notable real-world endorsement of market confidence, World Vision Korea completed the country’s first Ethereum sale on the Upbit exchange. By linking their corporate banking account to the exchange, they successfully converted 0.55 ETH donated to the nonprofit, signaling increasing liquidity and institutional trust.
Further regulations under the Virtual Asset User Protection Act's second phase will institute tighter controls over stablecoins and impose stricter standards for crypto exchanges to prevent unfair trading and secure users’ assets.
Both of South Korea’s main political parties support advancing the crypto ecosystem. The Democratic Party champions the introduction of spot Bitcoin ETFs, whereas the People Power Party focuses on establishing a digital asset promotion committee and reforming tax frameworks to nurture market growth.
Overall, these reforms mark a historic pivot in South Korea’s cryptocurrency landscape, aiming to transform it into a well-regulated, transparent, and investor-friendly market integrated with the global financial system.