South Korea is one of the world's leading cryptocurrency markets, with high adoption (over 16 million users, surpassing stock investors) and significant trading volume, reaching $130 billion annually. Recently, the country has implemented policies to regulate and promote the crypto market, highlighting the following points:
Strict regulations: Since 2017, South Korea has banned anonymous accounts for cryptocurrency transactions, requiring verified accounts with real names to combat money laundering and speculation. In 2025, new guidelines from the Financial Services Commission (FSC) tighten rules for exchanges, non-profit organizations, and crypto asset sales, allowing only tokens listed on at least three major exchanges and with strict KYC (Know Your Customer) requirements.
Institutional support: The election of President Lee Jae-myung in 2025, favorable to cryptocurrencies, marks a shift. Lee proposes legalizing spot Bitcoin ETFs, allowing investments in crypto assets by the national pension fund ($884 billion), and creating a stablecoin backed by the Korean won to reduce capital flight and dependence on currencies like USDT or USDC.
User protection: In 2023, a law was passed to protect cryptocurrency users, requiring exchanges to keep 80% of deposits in cold wallets. Additionally, a specialized unit against crypto crimes was created. In 2024, exchanges like Upbit and Bithumb compensated investors with $2.5 million for disruptions during the martial law crisis.
Challenges and volatility: The political crisis in December 2024, with the declaration of martial law by former President Yoon, caused a 30% drop in Bitcoin locally, reflecting the crypto market's sensitivity to political stability. Upbit faced investigations for possible KYC violations and monopolistic practices, and 35% of tokens on local exchanges were delisted, leading to losses due to low liquidity.
Transparency and oversight: Since 2023, public officials must declare their cryptocurrency holdings to enhance transparency, with new laws coming into effect in 2024. This response addresses previous scandals, such as the collapse of Terra in 2022, which accelerated stricter regulations.
Conclusion: South Korea combines strict regulation with a progressive approach to cryptocurrencies, seeking to protect investors while fostering innovation and the entry of institutional players. The presidency of Lee Jae-myung could consolidate the country as a global leader in digital assets, supported by its technological infrastructure and political stability.