Is crypto legal in South Korea, and how is it regulated?

Yes, crypto is legal in South Korea. Crypto regulation in Korea works in two layers: an anti-money-laundering registration system for exchanges since 2021, and a user protection law since 2024. A third, broader law was still being debated as of October 2026.

The market is large. Individuals in Korea held about 104 trillion won in digital assets at the end of 2024, around 5% of GDP, according to Bank of Korea figures cited by the US International Trade Administration.

How is crypto regulated in Korea?

The first layer came from an amended law on reporting financial transaction information. Crypto businesses had until September 24, 2021 to register with the Korea Financial Intelligence Unit (KoFIU), according to the Center for a New American Security.

To register, an exchange needed an information security certification and a partnership with a Korean bank that provides real-name verified accounts for customers. Exchanges must also verify identities and report suspicious transactions, the standards described in crypto anti-money-laundering rules. Operating without registration can bring up to five years in prison.

What is Korea's crypto law on user protection?

The Virtual Asset User Protection Act took effect on July 19, 2024. The Financial Services Commission (FSC) said it requires crypto businesses to:

• Protect cash. Customer deposits must be held safely at banks, and exchanges must pay users interest on them.
• Separate coins. Users' crypto must be kept apart from the company's own and match what customers are owed.
• Cover hacks. Firms need insurance or a reserve fund for losses from hacking or system failures.
• Watch for abuse. Exchanges must monitor trading at all times and report suspicious activity to the Financial Supervisory Service (FSS).

The law makes unfair trading, such as price manipulation, a crime. Offenders can face criminal punishment or a financial penalty. The FSS can inspect exchanges, and the FSC can order corrections, suspend business or impose fines.

What is next for South Korea crypto regulation?

A second-phase law, the Digital Asset Basic Act, was introduced on June 10, 2025. It would cover licensing for different types of crypto business, rules for won-backed stablecoins and limits on how much of an exchange a major shareholder can own.

The bill stalled over who should be allowed to issue stablecoins. The Bank of Korea wanted bank-led issuers, while the FSC opposed that limit, the law firm Chakwon reported. The government pledged to pass the law in 2026, but a public hearing planned for late September was effectively cancelled, The Asia Business Daily reported. Until then, exchanges self-regulate on listings and disclosures.

Tax is on a separate track. Under the current Income Tax Act, crypto gains above 2.5 million won a year are due to be taxed at 22%, including local tax, from January 1, 2027. The start date has already been postponed three times, and some lawmakers want it delayed again.

For how Korea compares with Japan and other countries, see crypto regulation around the world.

Rules differ by country and change often. Check the regulator's website or a qualified professional for your own situation.