#SouthKoreaCryptoPolicy

South Korea's crypto policy has undergone significant changes, shifting from a strict regulatory environment to a more crypto-friendly approach. Here are the key developments¹ ² ³:

- *Regulatory Framework*: The Financial Services Commission (FSC) is the primary regulatory body responsible for formulating policies. The FSC has introduced a two-phase regulatory framework for institutional crypto investment, aiming to promote innovation while ensuring investor protection.

- *Institutional Investment*: South Korea plans to lift its ban on institutional crypto investment, with a phased rollout starting in April. This move is expected to increase institutional participation in the crypto market.

- *Stablecoin Regulations*: The FSC is working on regulations for stablecoins, including a potential licensing system or reporting system. There is debate over whether the Bank of Korea or the FSC should oversee stablecoin regulation.

- *Digital Asset Committee*: The Democratic Party has established a Digital Asset Committee to shape national digital asset laws and policies. The committee aims to centralize crypto policymaking and accelerate South Korea's push to lead in digital finance.

- *Crypto Exchange Regulations*: Crypto exchanges in South Korea are subject to strict regulations, including Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements. Exchanges must also maintain separate accounts for customer assets and have insurance plans or reserves to protect against hacking or network crashes.

- *Taxation and Reporting*: Crypto service providers must report suspicious transactions and comply with tax regulations. The government is working on a comprehensive cryptocurrency legislation, the Digital Asset Basic Act, to provide regulatory guidelines for the industry.

Overall, South Korea's crypto policy is evolving to balance innovation and investor protection, with a focus on establishing a clear regulatory framework for the industry.