#SouthKoreaCryptoPolicy Here is the latest picture of the digital currency legislation status in South Korea – a comprehensive framework reflecting the country's transition from strict regulation to thoughtful adoption:

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🏛️ Current regulatory framework

1. Virtual Asset Users Protection Act (VAUPA)

Implemented on July 19, 2024, it is the first comprehensive law regulating digital currencies in South Korea.

Requires trading platforms:

Storing ≥ 80% of user funds in cold storage.

Keeping user deposits in licensed banks.

Providing insurance against breaches or a reserve fund to cover potential damages.

Includes measures to combat manipulation and protect investors by monitoring unfair activities.

2. Registration and monitoring requirements

All service providers must register 'real-name' accounts and obtain an ISMS certificate and a permit from KFIU.

Unregistered foreign platforms (such as KuCoin and BitMEX) face strict measures and potential access blocking.

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📈 Next phase: companies and institutions

3. Lifting the trading ban for institutions

Since 2017, trading through banks and companies has been banned as a measure against speculation and money laundering.

In early 2025, the Financial Services Commission (FSC) plans to grant 'real-name' accounts to non-profits and universities, followed by professional companies and investments in H2 2025.

The pilot program includes about 3,500 professional companies in this field and starts in the second half of 2025.

4. Guidelines for institutional trading

Scheduled for launch by the third quarter of 2025, includes AML standards, independent custody, and operational transparency.

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🌐 Enhancing cross-border monitoring and transactions

5. Regulating cross-border trade

Starting from the second half of 2025, businesses affecting cross-border cryptocurrency transfers must be registered and submit monthly reports to the Bank of Korea.

6. Combating crime

The virtual asset crime investigation unit was born in early 2025, participating in policy and procedure formulation against fraud and money laundering.