#SouthKoreaCryptoPolicy

South Korea has a comprehensive regulatory framework for cryptocurrencies, overseen by the Financial Services Commission (FSC). Here are the key aspects:

Regulatory Framework

- *Registration Requirements*: Crypto exchanges must register with the FSC to operate legally.

- *Real-name Verification*: Exchanges need to collaborate with local banks to provide real-name verification accounts for users.

- *KYC and AML*: Exchanges must implement Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures to verify user identities and monitor transactions.

Laws and Acts

- *Act on Reporting and Use of Specific Financial Transaction Information*: Regulates crypto industry through AML obligations.

- *Act on the Protection of Virtual Asset Users (VAUPA)*: Focuses on safeguarding user assets, preventing unfair practices, and granting FSC oversight powers.

- *Digital Asset Basic Act (DABA)*: Expected to be passed, proposes a self-regulatory body, stablecoin approval system, and clearer rules for crypto service providers ¹ ² ³.

Taxation

- *20% Tax on Crypto Gains*: Delayed until 2028, applies to profits exceeding 2.5 million won ($1,800).

Other Key Points

- *ICO Ban*: South Korea banned Initial Coin Offerings (ICOs) in 2017 due to fraud and market manipulation concerns.

- *STO Regulations*: Security Token Offerings (STOs) are viewed positively, with regulations in progress to allow STOs under the Capital Markets Law.

- *Won-based Stablecoin*: President Lee Jae-myung's administration is expected to promote the launch of a won-based stablecoin, contrasting with the failed Terra project .