#SouthKoreaCryptoPolicy

South Korea Tightens Crypto Policy Ahead of 2025 Tax Rollout

South Korea is stepping up its regulation of the cryptocurrency market with major changes taking effect in 2025. Under the Virtual Asset User Protection Act, coming into force in July 2024, exchanges must now keep 80% of customer funds in cold storage, hold insurance against hacks, and undergo regular audits.

Meanwhile, a long-delayed 20% capital gains tax on crypto profits exceeding 2.5 million KRW (~$2,000) is set to begin January 1, 2025. The government is also introducing cross-border reporting requirements, forcing crypto platforms to disclose foreign transactions to curb money laundering and illicit forex deals.

A second phase of crypto legislation is being drafted for late 2025. It aims to boost transparency, improve token listing standards, and regulate stablecoins and institutional trading. A new proposal may also allow crypto exchanges to partner with multiple banks and issue spot ETFs.

With these moves, South Korea is positioning itself as a strict but structured player in the global crypto market—balancing innovation with investor protection.