#SouthKoreaCryptoPolicy

🇰🇷 South Korea's Evolving Crypto Regulation

1. Investor Protection & Transparency

VAUPA (Virtual Asset User Protection Act) came into force July 2024, enforcing:

Safeguards on user deposits (cold wallets ≥ 80%)

Real-name bank accounts

Exchange-held insurance/reserve funds (binance.com)

Starting June 2024, public officials must disclose crypto holdings via a new asset-reporting system (coindesk.com).

2. AML/KYC & Licensing

Since 2021, all crypto exchanges must be registered with the Korea Financial Intelligence Unit (KoFIU), have ISMS security certification, and adhere to strict KYC/AML rules (ccn.com).

Privacy coins (like Monero) have been banned since 2021 (investopedia.com).

3. Corporate & Institutional Access

The FSC is piloting “real‑name” corporate accounts starting 2025, with nonprofits and institutions like universities permitted to trade crypto donations in the second half of 2025 (cointelegraph.com).

In April 2025, the ruling People Power Party proposed abolishing the one‑exchange‑one‑bank rule, opening doors for spot Bitcoin ETFs, and fully legalizing institutional crypto trading by end of year (coinedition.com).

4. Taxation & Stablecoins

A planned 20% crypto gains tax, capped to start at KRW 2.5 million, has been delayed—now expected 2027–2028 (invezz.com).

A dedicated stablecoin framework is under development; draft legislation expected by mid‑2025 (invezz.com).

5. Cross‑Border Monitoring

To combat FX-related crime (88% via crypto), the government plans new cross-border crypto registration and monthly transaction reports to the Bank of Korea starting 2025 (reuters.com).

6. Regulatory Balance & Innovation

South Korea maintains a cautious “positive list” regulatory stance—requiring explicit approval for new crypto services, despite rising concerns that this approach may push innovation abroad (itif.org).