South Korea is solidifying its position as a leading global crypto hub by proactively developing a comprehensive and robust regulatory framework for digital assets. In 2025, the nation has prioritized transparency and security, implementing stricter rules to foster a secure and innovative digital economy.
Major Crypto Regulatory Developments in South Korea (2025)
The year 2025 has been marked by significant regulatory advancements in South Korea's crypto landscape:
- July 29, 2025 – Bank of Korea (BoK) Establishes “Cryptoassets Department”: The BoK has formed a dedicated committee to monitor the burgeoning crypto market, focusing on legislative developments around stablecoins and broader digital asset discussions.
- July 9, 2025 – NTS Expands Crypto Tax Net: The National Tax Service (NTS) clarified that South Korean residents must report virtual assets received from foreign corporations as part of their comprehensive income tax.
- June 10, 2025 – General Act on Digital Assets Proposed: Representative Byung-deok Min introduced a comprehensive bill for digital assets, including "bankruptcy remoteness" rules for stablecoin reserves. This legislation aims to regulate crypto service providers, asset issuance and circulation, disclosure obligations, and prohibit unfair trading practices.
- June 1, 2025 – Donation Monetization Rules: The Financial Services Commission (FSC) allowed qualified non-profits (with over five years of operation and external audits) to sell donated digital assets. This comes with a 10% daily sales cap and a prohibition on selling through the exchange's own platform. Virtual asset exchanges can now also liquidate user fees into crypto, with non-profits required to form an internal review committee for donation suitability and transparency.
- May 20, 2025 – Stricter KYC and AML Compliance Finalized: The FSC implemented enhanced anti-money laundering (AML) regulations for public companies and professional investors in crypto trading. Banks are now mandated to follow Know Your Customer (KYC) procedures to ensure a secure and stable crypto environment.
- May 20, 2025 – New Crypto Regulations for Non-Profits and Exchanges: The FSC finalized regulations that categorize certain tokens as risky and restrict their operations. Non-profits are now limited to selling crypto assets only if they are listed on major exchanges.
- March 26, 2025 – Blocking Unauthorized Crypto Platforms: The Financial Intelligence Unit (FIU) is collaborating with Apple to block unauthorized crypto platforms. Google Play has already removed 17 unlicensed trading platform apps in South Korea.
- March 5, 2025 – Reconsidering Bitcoin ETF Ban: Drawing inspiration from Japan's evolving regulatory stance, the FSC is re-evaluating legal avenues to permit Bitcoin ETFs.
- February 2025 – FSC Announcements on Crypto Adoption and Licensing: The FSC has permitted non-profit organizations to open real-name verified accounts on cryptocurrency exchanges, a measure aimed at enhancing accountability. Additionally, a pilot program allowing 3,500 corporations and professional investors to trade on digital platforms is set to commence in Q3 2025.
- January 1, 2025 to January 1, 2027 – Crypto Tax Delay: The implementation of a 20% capital gains tax on crypto was postponed again, this time until 2027.
South Korean Government's Stance on Crypto
The South Korean government's approach to crypto is characterized by a strong emphasis on investor protection, AML compliance, and a structured licensing framework:
- Protection Measures: The Financial Supervisory Service (FSS), under the FSC, is actively scrutinizing the crypto space to identify and address illegal activities, prioritizing stricter regulations.
- AML Obligation: The FSS is currently focused on enforcing AML obligations for investors and trading platforms. The FSC is also developing a second phase of crypto regulations to ensure service provider compliance.
- Licensing/Registration:
- National License: Major crypto platforms like Bithumb, Flybit, and GDAC are officially registered with the FIU, granting them national licenses to operate. Virtual Asset Service Providers (VASPs) are required for digital trading in the country.
- Required Certification: Crypto exchanges must obtain Information Security Management System (ISMS) certification from the Korea Internet Security Agency (KISA), a requirement introduced alongside the real-name account verification system in 2025.
Crypto Tax in South Korea
- New Law: The 20% capital gains tax on crypto has been delayed until 2027, and there are no alternative crypto taxes in place as of 2025.
- Tax-Free Status: As crypto is not classified as legal tender or a financial asset in South Korea, it currently remains tax-free. However, crypto exchanges are legal and regulated by federal law.
Crypto Adoption Rate in South Korea
South Korea demonstrates significant crypto adoption and market growth:
- Adoption Rate: In 2025, the crypto user penetration rate in South Korea is approximately 22.48%, projected to reach 12.31 million users by 2026.
- Crypto Revenue: The current crypto market revenue is US$1.1 billion, with an expected increase to US$1.3 billion by 2026, growing at a rate of 12.15% from 2025 to 2026.
- Crypto Holdings: While the government has not disclosed its crypto holdings, policies are geared towards creating a safe environment for investors. Notably, in March, South Korea's Ethics Commission reported that 20% of public officials hold crypto assets.
Conclusion
In 2025, South Korea has cemented its status as one of the world's most dynamic crypto markets. Through smart regulatory steps aimed at enhancing user safety and establishing transparency in digital finance, the nation is building a robust crypto ecosystem. With the leadership of President Lee Jae-myung, South Korea is poised for continued growth in the digital assets landscape.
July 2025, Cryptoniteuae