#SouthKoreaCryptoPolicy South Korea and Crypto

Cryptocurrency policy in South Korea has undergone significant transformation in 2025, influenced by political dynamics, market pressures, and systematic efforts to balance innovation with investor protection. Here is a comprehensive analysis based on recent developments:

๐Ÿ›๏ธ 1. Key Regulatory Framework

- Virtual Asset User Protection Act (Effective July 2024): Focuses on preventing market manipulation (e.g., pump-and-dump), a requirement to store 80% of assets in cold wallets, and user compensation for service disruptions.

- Second Phase Regulatory Plan (Second Half of 2025): Being designed to include transparency in the listing of crypto assets on exchanges, standards for stablecoin issuance, and alignment of disclosure requirements with traditional finance.

- Tax: Capital gains tax of 20% on crypto has been postponed until 2027โ€” the third postponement since 2022โ€” to prevent capital flight and difficulties in tracking income.