#SouthKoreaCryptoPolicy South Korea has a comprehensive regulatory framework for cryptocurrencies, overseen by the Financial Services Commission (FSC). Here are the key aspects of South Korea's crypto policy ¹ ²:
- *Registration and Compliance*: Crypto exchanges must register with the FSC, collaborate with local banks for real-name verification accounts, and implement Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures.
- *User Asset Protection*: The Act on the Protection of Virtual Asset Users requires Virtual Asset Service Providers (VASPs) to separate customer assets, store them securely, and maintain transaction records for 15 years.
- *Unfair Transaction Activities*: The law prohibits undisclosed material information, market manipulation, and fraudulent activities, with penalties including imprisonment and fines.
- *Supervisory Authority*: The FSC has the power to supervise, inspect, and penalize VASPs, including imposing fines and imprisonment for non-compliance.
- *Taxation*: A 20% tax on cryptocurrency profits exceeding 2.5 million won ($1,800) has been delayed until 2028 due to concerns about market volatility and tax infrastructure.
- *ICOs and STOs*: South Korea banned Initial Coin Offerings (ICOs) in 2017, while Security Token Offerings (STOs) are viewed more positively, with regulations being developed to allow them under the Capital Markets Law.
The new president, Lee Jae-myung, is expected to bolster the crypto industry with policies like ³:
- *Digital Asset Basic Act*: A likely enactment to provide a regulatory framework for digital assets.
- *Spot Crypto ETFs*: Approval of exchange-traded funds for cryptocurrencies.
- *Won-based Stablecoin*: Launch of a centralized, fiat-backed currency.
- *Institutional Investment*: Encouraging pension funds to invest in digital assets.