South Korea is known as a very active market for cryptocurrencies, with daily trading volumes sometimes exceeding those of traditional stock markets. Therefore, the policies set by the government and regulatory bodies there have a significant local and global impact.
Key points regarding cryptocurrency policy in South Korea:
* Strict regulatory environment with a focus on investor protection: South Korea has maintained a relatively strict stance towards cryptocurrency regulation, aiming to combat money laundering and protect investors from fraud and market manipulation.
* The "real name" trading system: Since 2018, the government has required traders to use bank accounts with real names linked to approved cryptocurrency exchanges. This aims to increase transparency and accountability.
* Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) laws: These obligations have been expanded to include all virtual asset service providers (VASPs) in South Korea.
* Virtual Asset User Protection Act (VAUPA): This law came into effect in July 2024, focusing on protecting users' virtual asset holdings and preventing unfair practices in the virtual asset market, granting the Financial Services Commission (FSC) comprehensive supervisory and enforcement powers.
* Study of the possibility of introducing cryptocurrency exchange-traded funds (ETFs): Despite the previous ban on initial coin offerings (ICOs), discussions are ongoing about lifting the ban on ICOs and the possibility of allowing Bitcoin exchange-traded funds (ETFs), indicating a potential shift in policy towards integrating digital assets into the traditional financial system.
* Blockchain initiatives: In addition to regulating cryptocurrencies, South Korea is investing heavily in developing blockchain technology itself, with government initiatives to apply it in areas such as digital identity and public services.
* Challenges and transitions: There is still ongoing debate about the balance between protecting investors and fostering innovation in the cryptocurrency and blockchain space. Some see strict regulations as a hindrance to the growth of the local market, while others view them as essential for achieving stability and trust.
