Key developments in cryptocurrency in South Korea until mid-2025, covering regulations, institutional adoption, and market trends:
๐ 1. Recent Regulations and Policies
- Virtual Asset User Protection Act (July 2024): Introducing strict rules to prevent market manipulation, storing 80% of assets in cold wallets, and user compensation.
- Institutional Access Expansion:
- Non-profit organizations are allowed to transact crypto starting June 2025, provided that donation assets must be listed on โฅ3 major won (KRW)-based exchanges and must be converted to cash promptly.
- Professional investors and corporations are scheduled to participate starting Q3 2025.
- Capital Gains Tax 20%: Deferred until 2027 to prevent capital flight, although there are discussions about expediting implementation.
- Stablecoin Regulation: A legal framework for won (KRW)-based stablecoins is being developed, focusing on reserve audits and CBDC integration.
๐ฆ 2. Institutional Adoption and Innovation
- Corporations: The entertainment company K Wave Media allocates Rp8.1 trillion for Bitcoin investment, including node operations in the Lightning Network.
- Bitcoin ETF: Both political parties (Lee Jae-myung and Kim Moon-soo) support the legalization of Bitcoin spot ETFs to attract institutional investors.
- Banking Reforms: Criticism of the "one exchangeโone bank" policy (e.g., Upbit only works with K-Bank) may lead to an open model to reduce transaction costs.
๐ 3. Global Events and Market Influence
- Korea Blockchain Week 2025: A major event in Seoul (September 22-28) focusing on AI, blockchain, and Web3, featuring global sponsors like Bithumb.
- Bitcoin Seoul 2025: The largest Bitcoin conference in Asia (June 4-6), discussing policies, corporate adoption (e.g., Japan's Metaplanet), and showcasing El Salvador-style Bitcoin adoption.
- Market Volume: Korea contributes $5.4 billion in daily trading volume with 16 million active investors (32% of the population).
โ ๏ธ 4. Challenges and Criticisms
- Security: The virtual asset crime task force successfully confiscated $490 million in illegal assets, but hacking threats (e.g., North Korea's Lazarus group) remain high.
- Regulatory Risks: Accelerated crypto taxation could potentially reduce trading volumes by 60% and trigger a liquidity exodus to overseas exchanges.
- Dominance of Major Exchanges: Only exchanges like Upbit and Bithumb meet ISMS/AML certification standards, limiting competition.
๐ฎ 5. Future Projections
- Traditional Financial Integration: A token securities bill is under review to align digital assets with the conventional financial system.
- Global Influence: Korea's policies are predicted to trigger a shift in crypto market power from the West to East Asia in the next 12-18 months.
๐ Conclusion: South Korea is shaping the future of crypto through progressive regulations, corporate adoption, and global events. While security and tax challenges remain, cross-party political support and infrastructure innovations (such as KRW stablecoin) position the country as a leader in Asian crypto. For specific local crypto projects, information is limited; the current focus is more on policy frameworks and institutional adoption.$BNB #SouthKoreaCryptoPolicy
