New regulations for cryptocurrency exchange

South Korea's cryptocurrency exchange laws are stringent, including government registration and other procedures supervised by the Financial Supervisory Service of South Korea (FSS).

The South Korean government restricted the use of anonymous accounts in cryptocurrency trading in 2017 and banned local financial institutions from engaging in Bitcoin futures trading, following reports of suspicions of a ban. Additionally, the Financial Services Commission (FSC) tightened information requirements for banks with accounts on cryptocurrency exchange platforms in 2018.

The new laws restrict cryptocurrency trading to "real-name bank accounts," meaning that the operator (client) must create a real-name account at the same bank as their cryptocurrency operator to deposit or withdraw funds from their electronic wallet. In accordance with standard anti-money laundering and counter-terrorism financing (AML/CFT) regulations and structured transaction reporting requirements, both the bank and the operator must verify the operator's identity.

The South Korean government amended existing legislation in 2020, extending mandatory anti-money laundering and counter-terrorism financing obligations to all exchanges in South Korea.

Cryptocurrencies are not considered legal tender in South Korea, and exchange platforms, while legal, are governed by a strict regulatory framework.

In South Korea, cryptocurrency taxation is an ambiguous area: since transactions with cryptocurrencies are neither cash nor financial assets, they are currently exempt from taxes. The Ministry of Strategy and Finance, on the other hand, has stated that it is considering imposing a tax on profits from cryptocurrency transactions.

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