#SouthKoreaCryptoPolicy 🎯 Main Goal:
Making the crypto market safer, more transparent, and ready for institutions, without hindering innovation.
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🏛️ 1. New Law: VAUPA 2024
Virtual Asset User Protection Act will take effect starting July 2024.
✅ At least 80% of user funds must be stored in cold wallets (offline)
✅ User and company funds must be separated
✅ Exchanges must have insurance & emergency funds
✅ Authorities can audit & impose sanctions if necessary
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👤 2. Real Name Account Requirement
All crypto transactions must use bank accounts with real names (real-name account).
⛔ ICO (Initial Coin Offering) has been banned since 2017
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🏢 3. Institutions Allowed to Enter
Starting in 2025, companies, campuses, and non-profit organizations can:
✔️ Have crypto accounts
✔️ Legally transact digital assets
🧪 Testing of corporate crypto accounts will start in 2025, full release is targeted for the end of 2025.
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💸 4. Tax Deferred
20% tax on crypto profits deferred until 2028.
(Applicable if profits exceed 2.5 million won / approximately USD 2,000)
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📈 5. Crypto Spot ETF Coming
Regulators are considering the launch of Bitcoin & Ethereum spot ETFs.
🎯 Target: Before the end of 2025
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🛡️ 6. Investor Protection Strengthened
Minimum reserve fund of ₩3 billion (±USD 2.3 million) is mandatory
Exchanges must be able to provide compensation in case of disruptions
Automatic notifications for extreme price movements
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🌐 7. Foreign Exchanges Must Comply with Local Regulations
Exchanges like KuCoin, BitMEX, etc., may be blocked if they do not register with Korean authorities.
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📊 Pros & Cons of the Policy
Advantages:
Stronger investor protection
Opening doors for large investors & ETFs
Clearer regulations, reducing fraud
Disadvantages:
Startups and small projects may struggle to enter
ICO remains banned
Some projects choose to move abroad (e.g., to Singapore)
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🔮 What’s Coming? ✔️ Phase 2 of regulation: focus on listing and stablecoins
✔️ Local spot ETFs for Bitcoin & Ethereum
✔️ Synergy between banks & crypto exchanges will become stronger
