#SouthKoreaCryptoPolicy South Korea is a major player in the global cryptocurrency market, and its policy and regulatory landscape is constantly evolving. Here's a breakdown of the key aspects:
Key Regulatory Principles & Framework:
* Real-Name Accounts: A cornerstone of South Korea's crypto policy is the requirement for all cryptocurrency trading to occur through real-name bank accounts linked to exchanges. This is a crucial Anti-Money Laundering (AML) and Know Your Customer (KYC) measure, designed to prevent illicit activities and ensure transparency.
* Virtual Asset Service Providers (VASPs) Regulation: The Act on the Reporting and Use of Specific Financial Transaction Information (Special Financial Information Act), which came into effect in March 2021, legalizes cryptocurrency in South Korea and mandates strict compliance measures for VASPs. These include:
* Registration with the Financial Services Commission (FSC) and its Financial Intelligence Unit (FIU).
* Obtaining an Information Security Management System (ISMS) certification from the Korea Internet Security Agency (KISA).
* Implementing robust AML/KYC procedures, including customer due diligence and suspicious transaction reporting.
* Providing real-name bank accounts for customers at the same bank as their cryptocurrency dealer.
* Compliance with the "Travel Rule" for crypto transfers exceeding a certain threshold (KRW 1 million, approximately EUR 800).
* Virtual Asset User Protection Act (VAUPA): Enacted in July 2023 and effective July 2024, this act focuses on protecting virtual asset users and preventing unfair trading practices. It imposes criminal penalties, fines, and sanctions for activities like:
* Use of non-public material information.
* Market manipulation.
* Fraudulent and unfair trading practices.
* Trading in self-issued coins.
* Financial Services Commission (FSC) Oversight: The