1. Strict Regulations & Investor Protection**
- **"Virtual Asset User Protection Act" (Effective July 2024)**
- **Mandatory exchange reserves**: Exchanges must hold 80% of user deposits in cold wallets.
- **Insurance requirements**: Platforms must secure insurance for hacking incidents (minimum 5% of assets).
- **Penalties for fraud**: Up to **life imprisonment** for market manipulation or Ponzi schemes.
- **Ban on Privacy Coins (2025 Enforcement)**
- Monero (XMR), Zcash (ZEC), and other privacy-focused coins **delisted from all Korean exchanges**.
- **Transaction monitoring**: All crypto trades must comply with **FATF Travel Rule** (full KYC).
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### **2. Central Bank Digital Currency (CBDC) Pilot Expansion**
- **Digital Won Trials (Phase 2 – 2025)**
- Testing **offline payments, smart contracts, and cross-border remittances**.
- Partnering with **private banks (KB, Shinhan) and KakaoPay**.
- Expected **full launch by 2026**.
- **Impact on Stablecoins**:
- The Bank of Korea (BOK) warns **private stablecoins (e.g., USDT, USDC)** may face restrictions if they threaten monetary policy.
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### **3. Upcoming Legislation & Tax Policies**
- **20% Crypto Capital Gains Tax (Postponed to 2026)**
- Originally set for 2025, delayed due to **industry pushback**.
- **Tax-free threshold remains at ₩2.5 million (~$1,800) per year**.
- **New DAO Regulation (Draft Law, Q3 2025)**
- Decentralized Autonomous Organizations (DAOs) must register as **legal entities** for tax/compliance.
- Targets **DeFi protocols** operating in South Korea.
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### **4. Exchange & Market Developments**
- **Licensing Crackdown (June 2025 Update)**
- Only **5 exchanges** (Upbit, Bithumb, Coinone, Korbit, Gopax) fully licensed.
- **Foreign exchanges (Binance, OKX, Bybit)** still restricted from Korean users.
- **Upbit Dominance**
- Handles **80%+ of Korean crypto trading volume**.
- Recently listed **ZKsync (ZK) and EigenLayer (EIGEN)**.
---
### **5. Institutional & Corporate Adoption**
- **Samsung’s Crypto Integration**
- **Samsung Pay** now supports **Bitcoin, Ethereum, and Digital Won** payments.
- **Galaxy smartphones** to include **hardware wallet features** (2026).
- **LG & SK Group Blockchain Projects**
- LG testing **NFT-based loyalty programs**.
- SK Telecom launches **AI-powered crypto trading tools**.
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### **6. Security & Fraud Crackdowns**
- **2025 Hacking & Scam Stats**
- **$150M+ stolen** in DeFi exploits (mostly cross-chain bridge attacks).
- **30+ fraud cases** prosecuted under new law (average 7-year sentences).
- **New "Crypto Police Unit"**
- **100+ investigators** dedicated to crypto-related crimes.
---
### **7. Global Cooperation & Sanctions**
- **Joint US-South Korea Crypto Task Force**
- Tracking **North Korean Lazarus Group** hacks (over **$500M stolen in 2025**).
- Sanctioned **3 Russian OTC brokers** helping launder DPRK crypto.
- **FATF Compliance**
- South Korea **fully compliant** with anti-money laundering (AML) rules.
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### **Key Takeaways for 2025**
✅ **Strict but clear regulations** – Boosting institutional trust.
⚠️ **Privacy coins & unlicensed exchanges banned** – Reducing illicit activity.
🚀 **Digital Won & corporate adoption** – Driving mainstream crypto use.
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### **What to Watch Next**
- **Digital Won’s public beta test (Late 2025)**
- **Final DAO regulations (Q3 2025)**
- **Potential Binance re-entry negotiations**
Would you like details on any specific policy? Let me know! 🇰🇷
