#SouthKoreaCryptoPolicy

South Korea adopts a strict regulatory policy towards cryptocurrencies. Since 2021, it has required virtual asset service providers to register and monitor anti-money laundering in collaboration with banks. In 2023, it passed the Virtual Asset User Protection Act, which will come into effect in July 2024, mandating that 80% of assets be stored in cold wallets and securing investors' funds.

Immediate oversight of trades is also implemented, and stringent regulations are imposed on stablecoins, requiring a cash reserve of 1:1. By the second half of 2025, South Korea will begin regulating cross-border digital trading.

Overall, South Korea balances protecting investors and preventing financial crimes on one hand, while supporting innovation in the digital asset space on the other.

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Source: Reuters, CoinDesk, Axios Crypto, Korean Financial Services Commission.