#SouthKoreaCryptoPolicy

South Korea’s Crypto Policy: Striking a Balance Between Innovation and Regulation

South Korea is a major player in the global crypto ecosystem, often ranking among the top countries in crypto trading volume. The government’s approach has evolved to balance innovation with investor protection.

Regulatory Landscape:

Virtual Asset Service Provider (VASP) Registration:

Exchanges must register with the Financial Services Commission (FSC) and comply with strict anti-money laundering (AML) rules.

Real-Name Trading:

Introduced in 2018, it requires users to link bank accounts with real names to their exchange accounts.

Taxation:

While implementation has been delayed, South Korea plans to tax crypto gains at 20% on profits exceeding 2.5 million KRW (~$2,000 USD/year).

Security Focus:

There’s strong emphasis on protecting users after high-profile hacks in earlier years. Exchanges must meet cybersecurity and capital reserve standards.

Future Outlook:

South Korea supports blockchain innovation but continues to crack down on illicit activities and speculative mania. The upcoming Digital Asset Basic Act is expected to further formalize the sector.