#SouthKoreaCryptoPolicy South Korea is cementing its position as a global leader in cryptocurrency regulation with recent policy shifts aimed at balancing innovation and investor protection. In 2024, the Virtual Asset User Protection Act (VAUPA) came into effect, introducing robust safeguards for crypto users. This law mandates Virtual Asset Service Providers (VASPs) to segregate user assets, store 80% in cold wallets, and maintain insurance against hacks, ensuring a secure trading environment.

The Financial Services Commission (FSC) is also paving the way for institutional crypto investment, with a phased rollout starting in April 2025. Initially, law enforcement, non-profits, and universities can trade Bitcoin and Ethereum, followed by listed companies under the Capital Markets Act. This move reverses a 2017 ban, aligning South Korea with global trends.

Enhanced Know Your Customer (KYC) requirements are being enforced to curb money laundering, following reports of violations at exchanges like Upbit. Additionally, the National Assembly is reviewing tokenized securities legislation, signaling broader acceptance of digital assets.

Despite these advancements, crypto taxation remains delayed until 2027, reflecting cautious optimism. With bipartisan support and a tech-savvy population, South Korea is poised to become a crypto hub, fostering transparency and growth.