🇰🇷 First: Regulatory framework and investor protection
✅ Virtual Asset User Protection Law (issued in 2023 – effective in 2024)
• Digital currencies are officially defined as “virtual assets.”
• Cryptocurrency exchanges and related companies are required to comply with protection and transparency laws.
• The digital financial sector is subject to the supervision of the Financial Services Commission (FSC).
🔐 Strengthening “Know Your Customer” and anti-money laundering measures (June 2025)
• Banks and trading platforms are now required to implement strict user identity verification procedures.
• Non-profit organizations are not allowed to sell digital donations unless they meet stringent conditions such as:
• Reviewed financial records for 5 years.
• Internal committees for review and approval.
• Korean won bank accounts for transferring digital donations.
📉 Exclusion of weak liquidity currencies
• Listing or retaining inactive or low liquidity digital currencies (“zombie coins”) has been prohibited.
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🏛️ Second: Opening the field for institutions and non-profit organizations
• Starting from June 2025, universities, associations, and recognized charitable organizations will be allowed to sell digital assets under stringent controls.
• In the third quarter of 2025, pilot programs will begin allowing institutions and large companies to open accounts in their real names and trade directly, marking the end of the institutional ban that has lasted for 8 years.
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🗳️ Third: The pro-digital currency approach under the new administration
👤 New President Lee Jae-myung supports:
• Launching ETF funds for spot digital currencies, although they are still illegal at present.
• Allowing national pension funds to invest in digital currencies.
• Issuance of a stablecoin pegged to the Korean won (with government support) to protect the economy from capital flight.
• Relaxing the “one platform – one bank” rule, which restricted exchanges from cooperating with more than one bank.
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💼 Fourth: Tokenized Securities
• A new law is being prepared to regulate digital securities, making them part of the formal financial system.
• In the second half of 2025, registration and monthly reporting requirements will be imposed on companies that transfer digital funds outside of Korea.
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📝 Quick Summary:
Field June 2025 Second half of 2025
Investor Protection Protection Law, tightening KYC and AML Continuing to apply and expand laws for institutions
Non-profit organizations Allowed to sell digital currency donations —
Financial Institutions — They are allowed to trade officially under pilot programs
ETF Funds Strong political support Ongoing legislative efforts
Stablecoin Presidential proposal Regulatory framework is being prepared
Tokenized Securities Law under study Expected to be approved after the elections
Foreign currency transfers — Registration and monthly reporting are required
🧭 Summary
South Korea is taking serious steps towards comprehensive and advanced regulation of the digital currency market, where:
• Balancing investor protection and innovation.
• Gradually opening up the field for large institutions.
• Preparing a supportive environment for launching ETF funds, stablecoins, and trading tokenized securities.
All these measures make South Korea one of the most advanced Asian countries in regulating digital currencies.