Understanding Cryptocurrency Legality in South Korea: Regulations and Compliance

South Korea has established a comprehensive legal framework for cryptocurrency, aiming to balance innovation with investor protection. The Financial Services Commission (FSC) oversees the regulation of digital assets, ensuring that cryptocurrency exchanges and service providers adhere to strict compliance standards. Since the implementation of the Act on Reporting and Using Specified Financial Transaction Information, virtual asset service providers (VASPs) are required to register with the Financial Intelligence Unit (FIU) and partner with banks to obtain real-name accounts. This measure enhances transparency and combats money laundering activities.

In addition to registration requirements, South Korean authorities mandate that VASPs implement robust anti-money laundering (AML) and counter-terrorism financing (CTF) protocols. The FSC provides guidelines to ensure that these entities conduct thorough customer due diligence and report suspicious transactions. Non-compliance can result in severe penalties, including suspension of operations and criminal charges. These regulations reflect South Korea's commitment to fostering a secure and transparent cryptocurrency market.

The Financial Services Commission (FSC) has been actively working to establish a legal framework for virtual assets to ensure transparency and protect investors (1).

Despite stringent regulations, South Korea remains a significant player in the global cryptocurrency market. The government's proactive approach has instilled confidence among investors and encouraged the growth of blockchain technology. By continuously updating its regulatory measures, South Korea aims to adapt to the evolving digital asset landscape while safeguarding its financial system.

Source:
(1) Financial Services Commission (FSC)
(2) Financial Intelligence Unit (FIU)

Last updated: 08-05-2025 Disclaimer: This article does not provide legal advice. If you need legal advice, please contact an attorney directly.