#SouthKoreaCryptoPolicy South Korea is rapidly transforming its cryptocurrency policy in 2025, balancing innovation with investor protection. The Financial Services Commission (FSC) has launched a phased plan to allow institutional participation—starting with charities, universities, and nonprofits in early 2025, followed by around 3,500 corporations and professional investors in the second half of the year . This marks a significant break from the 2017 restrictions aimed at curbing speculation and money‐laundering.

At the heart of the regulatory framework lies the Virtual Asset User Protection Act, effective July 2024. It requires exchanges to safeguard user deposits—storing at least 80% in cold wallets, segregating assets, maintaining insurance reserves, and implementing anti‑fraud and AML measures .

Additionally, South Korea will regulate cross‑border virtual asset transactions by mandating registration and monthly reporting to the Bank of Korea, beginning in late 2025 . These reforms reflect Seoul’s aim to foster a robust and transparent crypto ecosystem while integrating institutions and shielding users from fraud.