#SouthKoreaCryptoPolicy

. Overall, South Korea continues shaping a robust regulatory model—supportive of innovation yet safeguarding users.

South Korea has steadily advanced its crypto regulatory framework to balance innovation and investor protection. In July 2024, the Virtual Asset User Protection Act took effect, mandating strict measures such as storing at least 80% of user assets in cold wallets, segregating client funds with licensed banks, and requiring insurance or reserves against hacks or liquidity crises . It also empowers the Financial Services Commission (FSC) with oversight authority and enforces AML/KYC compliance .

In early 2025, the FSC began developing a second-phase regulatory framework, aiming for mid‑2025 implementation. This includes enhanced transparency for token listings, stablecoin reserve requirements, and institutional investment rules—paving the way for corporate, non-profit, and institutional crypto participation . Concurrently, plans are underway to regulate cross-border crypto transactions, requiring registration and monthly reporting to the Bank of Korea to address FX-related crime .