The South Korean policy towards digital currencies is characterized by strict regulation to protect consumers and prevent illegal activities. Here is an overview of the main policies¹:

- *Legal Status*: Digital currencies are legal in South Korea but are subject to strict regulations against money laundering and securities.

- *Regulation*: Centralized and decentralized exchanges are closely monitored by regulatory bodies, such as the Financial Services Commission (FSC).

- *Exchange Licensing*: Exchanges must obtain a license from the FSC to operate legally.

- *Security Requirements*: Exchanges and virtual asset service providers must implement stringent security measures, including real-name verification and anti-money laundering requirements.

- *Taxes*: Digital currencies are subject to taxation, with a 20% tax imposed on profits exceeding $2,500 annually for individuals.

- *Future Regulatory Framework*: South Korea plans to implement new comprehensive legislation for digital currencies, called the "Digital Asset Basic Act" (DABA), to enhance regulation in the sector.

South Korea demonstrates a commitment to fostering technological innovation while ensuring consumer safety and protecting the financial market.