🔥South Korea's Crypto Policy Framework
Regulatory Framework‼️
South Korea's Financial Services Commission (FSC) is the primary regulator for cryptocurrencies, overseeing the digital asset market to protect investors and foster innovation. The Virtual Asset User Protection Act, enacted in July 2024, sets the stage for more comprehensive oversight in 2025.
💥Key Regulations
🔹️Licensing: Only government-approved exchanges can operate legally. Currently, five platforms have legal qualifications:
👉Upbit
👉Bithumb
👉Coinone
👉Korbit
🔸️Real-name Banking Cooperation Accounts: Exchanges must cooperate with banks to verify users' identities.
🔹️Information Security Management Certification (ISMS): Exchanges must obtain ISMS certification to ensure robust security measures.
🔸️Anti-Money Laundering (AML) and Know-Your-Customer (KYC): Exchanges must implement stringent AML/KYC processes to prevent money laundering and terrorism financing.
💥Taxation
🔹️Individuals with virtual asset capital gains exceeding 2.5 million Korean won (approximately $1,800) are required to pay a 20% tax.
🔸️The cryptocurrency tax system will take effect, with taxes being directly linked to taxpayers' real-name wallets for automatic on-chain reporting.
💥Upcoming Developments
🔹️South Korea is set to introduce a second phase of cryptocurrency regulations in the latter half of 2025, focusing on increasing transparency for new cryptocurrency listings on exchanges and mandating information disclosure for crypto projects.
🔸️The FSC is working to finalize the legislation by mid-2025, adopting a comprehensive approach to regulate cryptocurrency service providers, users, and the broader market landscape.