South Korea is stepping up in 2025 with stronger crypto rules โ not to shut things down, but to build trust, protect users, and support healthy growth.
Letโs walk through whatโs really happening and why it matters ๐
๐น Crypto for Good: New Rules for Nonprofits
The government has now allowed nonprofits โ like charities and universities โ to sell donated crypto, but with guardrails. Only organizations with 5+ years of operation and independent audits can qualify. Theyโre limited to selling just 10% of crypto holdings per day and canโt use their own platforms. An internal review board is also required to approve every donation sale.
This change adds more flexibility to the system โ especially for platforms that want to convert trading fees into crypto instead of fiat.
๐น KYC, AML, and Risky Tokens: Cleaning Up the Market
On May 20, new anti-money laundering (AML) rules were finalized. Public companies and professional investors must now follow stricter AML obligations. At the same time, banks must enforce stronger Know Your Customer (KYC) checks tied to real-name bank accounts โ already a unique requirement in Korea.
The government also introduced a new system to categorize high-risk tokens, limiting their use or sale if they donโt meet certain criteria. These moves aim to reduce fraud, pump-and-dumps, and rug pulls.
๐น Stopping Illegal Platforms Before They Spread
Earlier this year, South Korea's Financial Intelligence Unit (FIU) teamed up with Apple and Google to take down illegal crypto apps. Already, 17 unlicensed platforms have been removed from app stores โ showing how serious the country is about cracking down on shady platforms before they reach users.
๐น Bitcoin ETFs? Not Off the Table
Inspired by Japanโs recent progress, Korean regulators said theyโre reconsidering the ban on Bitcoin ETFs. This is a big shift, as the country previously banned crypto investment products for years. If approved, it could open the door to institutional crypto access through safer, regulated tools.
๐น More Institutions Can Now Use Crypto Legally
For the first time, the Financial Services Commission (FSC) has allowed charities and universities to open real-name verified accounts on exchanges โ a key requirement in Korea. Even bigger, a pilot program starting in Q3 2025 will let 3,500 corporations and professional investors legally trade crypto, marking a major milestone for institutional adoption.
๐น Still No Crypto Taxโฆ Until 2027
South Koreaโs long-awaited 20% capital gains tax on crypto has once again been delayed. It will now take effect in 2027, giving both retail investors and institutions more time to prepare. For now, crypto trading remains tax-free in practice.
๐น Whoโs Allowed to Operate in Korea?
Crypto exchanges like Bithumb, Flybit, and GDAC are fully registered with the FIU and must hold an ISMS certification from the Korea Internet & Security Agency (KISA). This helps ensure strong cybersecurity and compliance across platforms. No license = no legal trading.
๐ Crypto Use Is Growing Fast
In 2025, over 22% of South Koreans are crypto users โ and that number could hit 12.3 million by 2026. Revenue from the local crypto market is expected to grow from $1.1B to $1.3B in just one year.
Even government officials are getting involved: a report earlier this year showed 1 in 5 public servants hold crypto, including high-ranking officials.
๐ Conclusion: A Tightened but Thriving Market
Under President Lee Jae-myung, South Korea is not turning away from crypto โ itโs building smarter laws. By protecting users, encouraging legal adoption, and cracking down on bad actors, the country is shaping one of the most advanced and investor-friendly crypto environments in the world.
If Asia is the next frontier for crypto growth, ๐ฐ๐ท South Korea just might be leading the way.
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