#SouthKoreaCryptoPolicy

In July 2024, the Virtual Asset User Protection Act (VAUPA) was enacted, marking the nation’s first comprehensive crypto regulation. This law mandates that exchanges store at least 80% of user funds in cold wallets and segregate user assets from their own. It also requires exchanges to maintain insurance or reserve funds to cover potential losses from hacks or system failures. Additionally, the act prohibits market manipulation and empowers regulators to oversee and sanction virtual asset service providers (VASPs) .  

A significant policy shift occurred in 2025 when South Korea began lifting its ban on institutional crypto trading. The phased approach started with non-profit organizations and universities being permitted to open real-name verified accounts on exchanges. By the second half of 2025, a pilot program allowed listed companies and professional investors to access the crypto markets .  

Looking ahead, South Korea plans to introduce a new crypto law in the second half of 2025, focusing on enhancing transparency and accountability among exchanges and stablecoin issuers . 

These developments position South Korea as a progressive player in the global cryptocurrency landscape, fostering a regulatory environment that encourages innovation while safeguarding investors.