🌎 South Korea Advances Crypto Regulations

South Korea Advances Crypto Regulations, Focusing on Stablecoins and User Protection

South Korea’s Financial Services Commission (FSC) has initiated the second phase of its crypto regulations, prioritizing stablecoins and enhanced user protection measures. The move aims to bolster the country’s cryptocurrency market amidst the rapidly changing global landscape.

Kim So-young, Vice Chairman of the FSC, highlighted the need for updated regulations, citing the global crypto market’s “rapid changes with mixed feelings of optimism and uncertainty.” South Korea’s first crypto regulation, the Virtual Asset User Protection Act, came into effect in July 2024, defining “virtual assets,” establishing user protection rules, and outlining penalties for unfair trade practices.

Key Areas of Focus for the New Regulations

The second phase of the regulations is expected to cover:

Stablecoins
Crypto exchanges
Business entry regulations

While specific details are yet to be revealed, the FSC plans to collaborate with other government agencies to finalize the second phase of the law by mid-2025.

South Korea Eases Crypto Restrictions, Plans to Issue Real-Name Accounts

In a significant development, South Korea is considering easing restrictions on corporate crypto trading and plans to gradually issue real-name accounts to institutional investors. This update will enable companies, starting with non-profit organizations, to open real-name accounts on crypto exchanges.

Currently, South Korea’s crypto laws only permit retail investors with verified real-name accounts to trade. While there is no official ban on institutional investors, banks have been advised not to issue real-name accounts to corporations.

Chairman of the South Korea Exchange, Jeong Eun-bo, expressed the exchange’s intention to “benchmark overseas cases for new businesses such as cryptocurrency ETFs and explore new areas in the capital market.” The FSC also plans to allow companies to launch security token offerings in 2025.