--- title: "South Korea Crypto Regulation Monitor | cryptoassets.gi" canonical: https://cryptoassets.gi/jurisdictions/south-korea/ source_html: /jurisdictions/south-korea/index.html description: "South Korea crypto asset regulation: 9 categories, 54 sourced findings, updated 2026-11-04. Licensing, token classification, stablecoins, tax treatment." generated_at: 2026-11-07T14:19:44Z content_sha256: 523866dc6758f6353515923c99a84645cb716eaafc613da17a81966a1681711e generator: "fe-fleet/md-twin@1.0" --- # South Korea Crypto & Digital Asset Regulation schema crypto-v2.0.0 trajectory: not yet assessed in transition overlaps: [Sentinel (AML/CFT)](https://sentinel.gi/jurisdictions/south-korea/), [World Payments](https://payments.gi/jurisdictions/south-korea/) Last updated 2026-11-04 · 9 categories · 54 sourced findings · 52 sources in the cumulative register Download report (PDF) Expand all Evidence re-verified: 2026-11-04 · Position last changed: 2026-11-04 · Record history & provenance ▾ Methodology & record provenance: Module confidence is derived from the underlying claims (source tier and primary excerpt retention), while statutory legal force is tracked independently. Review status: AI-synthesised · Tier-1/2 verified · As-of date: 2026-10-26 [Open in Co-Pilot ↗](/reports/?type=copilot&j=SOUTH-KOREA)[Build Report](/reports/?j=SOUTH-KOREA)[Compare](/compare/?j=SOUTH-KOREA) Framework posture In transition 8 of 9 modules populated · AI-synthesised · Tier-1/2 verified Lead supervisory authority Korea Financial Intelligence Unit (FIU) Primary statutory & supervisory perimeter Next milestone (> 2026-10-26) 2026-11 Digital Asset Basic Act (Phase 2) expected National Assembly submission Module coverage & confidence 8 / 9 modules assessed 0 Confirmed · 8 Probable · 0 Uncertain · 1 Not yet assessed 9 Categories 0 Moved this cycle 0 Key judgments 3 Open gaps 54 Findings 0 Tier-1 sources Confidence mix 9 unpopulated (sums to 9 rendered categories; click to filter) No categories moved this cycle. ## Jurisdiction lead brief ###### Latest update · 4 November 2026 #### Lead Signal South Korea's treatment of cross-border crypto flows is tightening on two tracks at once, and the two should not be read as one development. A registration requirement for firms conducting cross-border virtual-asset transfers, built into an amendment of the Foreign Exchange Transactions Act, passed the National Assembly on 7 May 2026 and is reported to take effect in early December 2026, with unregistered operation reported to carry criminal exposure. That amendment is distinct from, though legislatively adjacent to, a separate strand of work under the same statute: the Bank of Korea and the government are pursuing a further amendment that would classify stablecoins as payment instruments for cross-border transfers, with a draft decree open for comment to roughly 26 October 2026. The first strand is enacted and awaiting effect; the second is still at the consultation stage. Firms moving value into or out of Korea through virtual-asset channels face a registration obligation arriving on a fixed near-term date, while the question of how a stablecoin itself is characterised for foreign-exchange purposes remains open. #### Other Developments On the stablecoin side specifically, reporting on the broader Digital Asset Basic Act's second phase describes provisions that would confine domestic won-denominated stablecoin issuance to licensed financial institutions or joint ventures that include one, with 1:1 reserve backing and monthly audits. This remains a proposal under negotiation rather than enacted law, and it sits apart from the narrower foreign-exchange reclassification work described above, which addresses how stablecoins are treated in cross-border transfer and reporting rather than who may issue them domestically. Both strands point toward the same general direction, tighter integration of stablecoin activity into existing financial-sector oversight, but they are proceeding through different legislative vehicles and on different timetables. #### Cross-Monitor Connections The foreign-exchange-law amendments touching both stablecoin classification and cross-border transfer registration draw on the same underlying statute that cross-border payments oversight already tracks for non-crypto financial flows, meaning firms operating payment rails alongside virtual-asset services face a foreign-exchange compliance surface that is expanding on both fronts simultaneously. The same registration regime also has an anti-money-laundering dimension, since a firm's capacity to move virtual assets across the border without registering is the same capacity that unregistered-operator enforcement elsewhere in the system is aimed at closing off. #### Outlook The cross-border transfer registration requirement is the nearer-term event: if the reported effective date holds, firms without the required registration face a hard compliance deadline in early December 2026 carrying criminal exposure for continued unregistered operation. The stablecoin foreign-exchange reclassification is on a slower and less certain track, with the comment period on the draft decree closing only in late October 2026 and no enactment date yet fixed; its eventual shape will determine whether stablecoin issuers and users face formal payment-instrument status under foreign-exchange law or continue operating in the current ambiguous space. Both developments warrant separate tracking rather than being treated as a single reform. 4 earlier updates not shown here. ###### Standing brief · as of 3 August 2026 Written before the update above. Where they differ, the update is the more recent position. #### Lead Signal South Korea's security-token legislation illustrates how a formally enacted framework can still leave the operating environment materially unregulated for over a year. The Capital Markets Act and Electronic Securities Act amendments that institutionalize the issuance and trading of tokenized securities via distributed ledger technology passed the National Assembly on 15 January 2026, but do not take legal effect until approximately February 2027 -- a roughly one-year gap between enactment and applicability that this cycle's research corrected after an initial mislabeling of the claim as already in force (CLM-KR-f2b3d8e6). The correction matters for market participants scoping token-offering timelines: firms structuring security-token issuances against Korean law today are operating in a legislated-but-inert window, not yet subject to the DLT-based securities regime the amendments create, and should not treat February 2027 as arriving with residual grace-period flexibility given how deliberately Korean lawmakers have separated enactment from commencement across this and other files this cycle (CLM-KR-e7a4c9f2 shows the identical pattern for the 2027 crypto income tax). #### Other Developments The comprehensive Digital Asset Basic Act (DABA) remains the single largest pending structural change to Korea's crypto regime, and it continues to move in pieces rather than as a settled package. FSC and ruling-party negotiators have provisionally converged on a 20% cap on major-shareholder stakes in crypto exchanges, with exceptions up to 34% and a three-year grace period for incumbents (CLM-KR-d4b8f6c3), while the broader DABA proposal would extend licensing, registration and reporting obligations across trading, brokerage, custody and advisory businesses (CLM-KR-c9e2a4f1). The stablecoin component of DABA is the most contested: the proposal would require issuer authorization, 100% reserve custody with licensed banks, and redemption rights for holders (CLM-KR-a6c4e1b9, CLM-KR-b7d5f2c1), but the Bank of Korea's insistence on majority-bank ownership for issuers has stalled agreement with the FSC, leaving Korea with no binding stablecoin framework and KRW-pegged pilots such as BDACS KRW1 confined to non-circulating proof-of-concept status (CLM-KR-e4a2c8f7). Consumer protection continues to tighten incrementally on top of an already-enforced VAUPA custody and insurance baseline (80% cold-storage segregation, bank-delegated cash custody, mandatory insurance or reserve funds -- CLM-KR-f2b9d6a5, CLM-KR-a3c7e4f9, CLM-KR-b4d8f1e6). The FSC/FSS ordered a unified mandatory withdrawal-delay system across domestic exchanges in April 2026 to counter voice-phishing fraud (CLM-KR-c5e9a2d3), and separately drafted guidelines that would cap listed-company and professional-investor crypto allocations at 5% of equity capital annually across the top 20 assets by market value (CLM-KR-d6f1b3a8) -- still at guideline stage. On tax, the scheduled 2027 crypto income tax (20% national/22% with local tax, above a 2.5 million won annual deduction) is formally enacted but not yet effective (CLM-KR-e7a4c9f2), and now faces a repeal bill referred to a National Assembly subcommittee on 29 July 2026 -- the third such delay or repeal effort since the tax was originally targeted for 2022 (CLM-KR-f8b5d1e3). The National Tax Service is separately building an AI-based transaction-tracking system ahead of the planned start date (CLM-KR-a9c6e3f7). A parallel and unresolved question is whether the Ministry of Economy and Finance's view that tokenized stocks are securities rather than virtual assets will gain FSC concurrence, which would open Capital Markets Act taxation as early as the second half of 2026, including for tokens issued via overseas platforms (CLM-KR-b8d4f2a9, CLM-KR-b1d8f4a5). Cross-border oversight is also tightening. The FTRA Travel Rule already requires exchanges to collect sender/recipient data above a 1,000,000 won threshold (CLM-KR-c2e9a7d4), and the FSC has signalled plans to remove that threshold entirely (CLM-KR-d3f1b8e5). A May 2026 Foreign Exchange Transactions Act amendment now requires entities conducting cross-border virtual-asset-transfer business to register with the Ministry of Economy and Finance, though its precise effective date remains unestablished from available sourcing (CLM-KR-e4a2c6f9). The Bank of Korea has separately planned monthly pre-registration and reporting of cross-border stablecoin and crypto transactions to curb FX-related crypto crime (CLM-KR-f5b3d9a6) -- a measure this cycle's composition corrected from an internally inconsistent "in force" label to "proposed," consistent with its source framing as a still-forward-looking plan rather than an implemented rule. Elsewhere, on-chain activity outside centralized-exchange lending remains a persistent regulatory blind spot: only exchange-based lending is directly regulated, with an interest cap at 20% and a ban on leveraged lending beyond collateral value for top-20 assets (CLM-KR-c3e7a1f8), while staking, DeFi, mining and validator activity remain wholly unaddressed by statute pending DABA (CLM-KR-d9f1b3a2). Token classification for NFTs remains case-by-case, hinging on fungibility, fractionalizability and payment capability (CLM-KR-a7c5e9b4), and the FSC's 2023 Token Securities Guidelines continue to govern the boundary between securities-classified tokens and ordinary virtual assets pending the STO amendments taking effect (CLM-KR-e1a9c7d5). #### Cross-Monitor Connections Two threads in this cycle sit outside crypto's own analytical remit and are flagged for coordination rather than original analysis here. Travel Rule administration and the FX Transactions Act's new cross-border registration requirement (CLM-KR-c2e9a7d4, CLM-KR-e4a2c6f9) fall within the AML/CFT surface now subscribed from financial-integrity, which carries the substantive illicit-finance analysis for Korea's KYC, STR and Travel Rule enforcement activity; crypto's own aml_cft_regime module remains intentionally unpopulated pending that fleet consolidation. Separately, the 2027 crypto income tax's characterization work and the National Tax Service's enforcement tooling (CLM-KR-e7a4c9f2), together with the unresolved stablecoin-issuance and reserve regime (CLM-KR-e4a2c8f7), carry payments- and tax-adjacent implications flagged for world-payments coordination, particularly as any eventual DABA stablecoin framework will shape how Korean-issued or Korean-accessible stablecoins interact with cross-border payment rails. #### Outlook The near-term calendar is dense with contingent events rather than settled ones. DABA's next plausible enactment checkpoint sits in the third quarter of 2026, and its outcome will simultaneously resolve the ownership-cap question for exchanges and the stablecoin-issuer deadlock between the Bank of Korea and the FSC. The STO amendments' February 2027 effective date and the crypto income tax's January 2027 effective date are both fixed on paper but exposed to political reversal -- the tax repeal bill now sitting in subcommittee is the more immediate test of that exposure. Whether the Ministry of Economy and Finance's securities-classification view of tokenized stocks gains FSC concurrence this year would independently reshape both the token_classification and tax_treatment pictures. Given that this cycle's entire evidentiary base was T4 secondary reporting with zero primary-regulator citations, the next research pass should prioritize FSC.go.kr, NTS.go.kr and law.go.kr statute text specifically to test whether the eleven claims downgraded from Confirmed to Probable this cycle can be restored, and whether KR's three-way FSC/Bank of Korea/Ministry of Economy and Finance stablecoin dispute warrants sub-jurisdictional tracking analogous to other multi-regulator jurisdictions. Read full brief · 1561 words Key regulatory facts for South Korea Regulatory Dimension South Korea Standing Position Jurisdiction South Korea (KR) Regulatory Scope Crypto & Digital Asset Regulation (9 modules, 54 sourced findings) Crypto Licensing South Korea's baseline VASP registration and conduct-of-business regime under the FTRA and VAUPA is firmly in force and enforced, including bank real-name partnership and ISMS certification requirements that now also... Token Classification Security tokens are governed by the FSC's 2023 Token Securities Guidelines and, prospectively, by Capital Markets Act/Electronic Securities Act amendments enacted 15 January 2026 but not effective until approximately... On-Chain Activity Regime Only centralized-exchange crypto lending is directly regulated, via an FSC/DAXA guideline capping interest at 20% and banning leveraged lending beyond collateral value for top-20 assets. Stablecoin Regime South Korea has no binding stablecoin issuance framework; KRW-pegged pilots remain non-circulating proof-of-concept deployments. Primary Instruments Cited Korea Financial Intelligence Unit (FIU), Google Play, Digital Asset Basic Act (DABA) proposal, FSC / ruling party negotiators, Naver Financial / Dunamu Last Confirmed / Updated 2026-11-04 (52 sources in cumulative register) 9 of 9 categories Signal Moved Judgment Gap Density Comfortable Compact Expand all sources Reset all Selections OR within a group, AND across groups. Press / to search. ### South Korea: C1 Crypto LicensingAmberEnacted in forceModule confidence: Probable▾ South Korea's baseline VASP registration and conduct-of-business regime under the FTRA and VAUPA is firmly in force and enforced, including bank real-name partnership and ISMS certification requirements that now also condition continued Korean Google Play listing for exchange apps. A comprehensive second-tier licensing overlay under the proposed Digital Asset Basic Act (DABA), covering trading, brokerage, custody, advisory and a provisionally-agreed 20% ownership cap on exchange shareholders, remains unenacted with H2 2026 as the next plausible checkpoint. Open gap — crypto-int-3 Whether the consolidated Digital Asset Basic Act bill has been formally filed/introduced to the National Assembly as of November 2026 is unresolved. Thin-evidence module; FR-1261 new scope not yet researched for KR. Horizon · 2026-Q4 (± six months) KR Digital Asset Basic Act (DABA) parliamentary review Proposed · Tier 3 source Horizon · 2026-11 (± a quarter) Digital Asset Basic Act (Phase 2) expected National Assembly submission Proposed · Tier 3 source Horizon · 2026-Q4 (± six months) Digital Asset Basic Act (Phase 2) National Assembly review expected Proposed · Tier 3 source #### Crypto Licensing South Korea's baseline licensing architecture rests on the Act on Reporting and Use of Specified Financial Transaction Information (FTRA) and the Virtual Asset User Protection Act (VAUPA), both firmly in force and actively enforced. VASP registration with the Korea Financial Intelligence Unit (FIU) requires a bank real-name account partnership and ISMS security certification (CLM-KR-a1c4e8b2); this baseline conduct regime has real market-access consequences beyond domestic enforcement -- Google Play now requires demonstration of FIU VASP registration for exchange apps to remain listed on the Korean store, effective 28 January 2026 (CLM-KR-b3f7d21a). Layered on top of this baseline, but not yet enacted, is the Digital Asset Basic Act (DABA), a comprehensive proposal that would introduce licensing, registration and reporting requirements spanning trading, brokerage, custody and advisory businesses (CLM-KR-c9e2a4f1). FSC officials and ruling-party negotiators have provisionally agreed a structural feature of that regime -- a 20% cap on major-shareholder stakes in crypto exchanges, with exceptions up to 34% and a three-year grace period for incumbent shareholders above the cap (CLM-KR-d4b8f6c3) -- though the cap remains part of an unenacted negotiation rather than settled law. The result is a two-tier picture: a registration and conduct baseline that is mature, enforced, and already shaping platform access decisions, sitting beneath a second-tier comprehensive licensing overlay that remains proposal-stage and contingent on further National Assembly action. #### Outlook DABA's next plausible enactment checkpoint is the third quarter of 2026. Passage would resolve the ownership-cap question definitively and extend licensing obligations to categories of digital-asset business -- brokerage, custody, advisory -- that currently sit outside the FTRA/VAUPA baseline. Continued delay would leave Korea's licensing perimeter unchanged: registration-and-conduct obligations enforced, but the broader market-structure questions unresolved. Sourcing on the ownership-cap negotiation and the DABA text itself remains T4-only; primary confirmation from FSC.go.kr or National Assembly bill text would materially firm up confidence here. Read full sub-brief · 305 words Periodic update · new data 2026-10-06 #### Crypto Licensing The proposed share-exchange merger between Naver Financial and Dunamu, Korea's largest cryptocurrency exchange operator, has been delayed again according to a 6 July 2026 press report. Shareholder meetings, originally set for 18 August 2026, have been moved to 19 November 2026, and the share-exchange date, originally 30 September 2026, has been re-targeted to 31 December 2026. This development is sourced to a single Korean business-press outlet (Hankyung). No DART corporate filing, FSC notice, or Korea Fair Trade Commission filing has been located to corroborate the re-timing, so it is treated as a press-reported data point on the transaction's progress rather than a regulator-confirmed milestone. The underlying reasons for the repeated delay are not established by the available sourcing. The transaction is material to Korea's crypto-licensing landscape because Dunamu operates Korea's largest cryptocurrency exchange, and a completed share exchange would bring that exchange under the same corporate structure as a major payments and financial-services platform, with implications for how exchange licensing and corporate ownership interact going forward. #### Outlook The newly stated 19 November 2026 shareholder-meeting date and 31 December 2026 share-exchange date are the next milestones to track for this transaction. Given that this is already a second reported delay, uncorroborated by any primary regulatory or corporate filing, confirmation through a DART disclosure or FSC/KFTC filing would materially strengthen confidence in the transaction timeline. Sources and findings (10) - T4 · CoinDesk[Korea Financial Intelligence Unit (FIU)](https://www.coindesk.com/policy/2021/04/01/s-koreas-crypto-rules-might-only-help-the-big-4-exchanges) — VASP registration with bank real-name partnership and ISMS security certification - T4 · The Block[Google Play](https://www.theblock.co/post/385892/google-play-ban-south-korea) — demonstration of FIU VASP registration to remain listed on the Korean Google Play store - T4 · CoinDesk[Digital Asset Basic Act (DABA) proposal](https://www.coindesk.com/policy/2026/04/08/south-korea-proposes-cryptocurrency-law-with-bank-style-rules-for-stablecoins) — licensing, registration and reporting requirements for digital asset trading, brokerage, custody and advisory businesses - T4 · The Block[FSC / ruling party negotiators](https://www.theblock.co/post/392169/south-korean-authorities-settle-ownership-limit) — 20% cap on major-shareholder stakes in crypto exchanges under forthcoming DABA, with exceptions to 34% and a 3-year grace period for incumbents - T2[Naver Financial / Dunamu](https://www.hankyung.com/article/2026070686961) — Shareholder meetings moved from 18 August to 19 November 2026; share-exchange date re-targeted from 30 September to 31 December 2026. - T3[Virtual Asset User Protection Act (VAUPA)](https://blog.chakwon.com/2026/04/10/where-korea-stands-on-crypto-regulation-in-2026-a-legal-overview/) — VASPs must register with KoFIU and comply with VAUPA's user-asset-protection, custody-segregation and unfair-trading-prohibition duties, in force since 2024-07-19. - T3[Financial Services Commission (Korea)](https://www.cryptotimes.io/2026/10/23/south-korea-plans-foreign-exchange-transactions-act-amendment-for-stablecoins/) — Domestic access restriction or service termination ordered for 27 websites operated by unregistered crypto businesses, announced 2026-10-13. - T3[Digital Asset Basic Act (Phase 2)](https://finance.biggo.com/news/c3a7a361-39db-4cfd-b392-86e559eefd95) — Consolidated government-ruling-party bill introducing positive authorisation (licensing) for exchanges and re-legalising ICOs under conditions remains under inter-party negotiation; National Assembly review reportedly expected November 2026. - T3[Digital Asset Basic Act](https://www.kucoin.com/news/flash/south-korea-to-review-second-phase-of-crypto-legislation-in-november) — Remains under consultation; FSC expected submission to National Assembly bill-review panel in November 2026. - T3[Virtual Asset User Protection Act](https://practiceguides.chambers.com/practice-guides/blockchain-crypto-assets-2026/south-korea/trends-and-developments) — KR has entered the first prosecutorial wave under VAUPA, alongside expanded regulatory surveillance over algorithmic trading. ### South Korea: C2 Token ClassificationAmberEnacted in forceModule confidence: Probable▾ Security tokens are governed by the FSC's 2023 Token Securities Guidelines and, prospectively, by Capital Markets Act/Electronic Securities Act amendments enacted 15 January 2026 but not effective until approximately February 2027 (corrected this cycle from an initial in_force mislabeling). NFT classification remains case-by-case based on fungibility, fractionalizability and payment capability, and the classification of tokenized stocks as securities versus virtual assets remains unresolved pending FSC concurrence with the Ministry of Economy and Finance. Horizon · 2027-02-04 (± a quarter) Token securities subordinate-regulation amendments in force Consultation · Tier 1 source Periodic update · new data 2026-10-06 #### Token Classification The Financial Services Commission has opened formal pre-announcement (입법예고) of subordinate-regulation amendments under the Electronic Securities Act and the Capital Markets Act concerning token securities. The notice period runs from 2 October to 11 November 2026, and the amending Acts themselves are scheduled to take effect on 4 February 2027. This confirmed development corrects an earlier, unverified placement of the pre-announcement in late September 2026. The approach works through Korea's existing securities-law architecture rather than creating a standalone digital-asset classification regime: token securities are being addressed through subordinate regulations beneath the Electronic Securities Act and the Capital Markets Act, which will set out how token-form securities are registered, issued and traded within the established capital-markets framework. This signals that Korea is extending its existing securities perimeter to capture token securities specifically, rather than classifying tokens generally through a separate crypto-asset statute. As the amendments are presently at the pre-announcement/comment stage, the precise classification boundaries, including which token structures fall within the token-securities definition being targeted by the subordinate rules, are not yet settled. The six-week comment period to 11 November 2026 is the formal opportunity for stakeholders to respond before the rules are finalised ahead of the 4 February 2027 commencement date. #### Outlook Two dates anchor the near-term classification picture: the close of the comment period on 11 November 2026 and the scheduled commencement of the amending Acts on 4 February 2027. The content of the finalized subordinate regulations, once published after the comment period closes, will be the next material development to establish the actual classification boundary for token securities under Korean law. C2 · Token Classification — Full Module Record 0 sub-modules · 180 words · 7 traced claims · Re-verified 2026-11-04 The decision headline, regulatory posture (Amber), primary framework, and supervisory authority above are open on the Free Explore layer. Register free with a business email for 3 full-record passes a month , or unlock all 170 jurisdictions with Pro (£39/mo · £99/mo all products) or Firm (£199/mo · £449/mo all products) . [Unlock with Free Pass / Sign In](https://a-i.gi/auth/login) [View Pro & Firm Plans (£39 / £199)](https://a-i.gi/licensing/#plans)[View Open Exemplar (Gibraltar)](/jurisdictions/gi/) ### South Korea: C3 On-Chain Activity RegimeAmberEnacted in forceModule confidence: Probable▾ Only centralized-exchange crypto lending is directly regulated, via an FSC/DAXA guideline capping interest at 20% and banning leveraged lending beyond collateral value for top-20 assets. Staking, DeFi, mining, node operation and validator activity remain wholly unaddressed by Korean statute, a persistent gap pending DABA implementation. C3 · On-Chain Activity — Full Module Record 0 sub-modules · 180 words · 2 traced claims · Re-verified 2026-11-04 The decision headline, regulatory posture (Amber), primary framework, and supervisory authority above are open on the Free Explore layer. Register free with a business email for 3 full-record passes a month , or unlock all 170 jurisdictions with Pro (£39/mo · £99/mo all products) or Firm (£199/mo · £449/mo all products) . [Unlock with Free Pass / Sign In](https://a-i.gi/auth/login)[View Pro & Firm Plans (£39 / £199)](https://a-i.gi/licensing/#plans)[View Open Exemplar (Gibraltar)](/jurisdictions/gi/) ### South Korea: C4 Stablecoin RegimeRedEnacted in forceModule confidence: Probable▾ South Korea has no binding stablecoin issuance framework; KRW-pegged pilots remain non-circulating proof-of-concept deployments. The proposed DABA stablecoin-issuer authorization regime -- covering capital, reserve custody, redemption rights and disclosure standards -- remains deadlocked over a Bank of Korea demand for majority-bank ownership of issuers versus the FSC's more flexible stance, with no systemic-designation regime for large stablecoins yet drafted. Horizon · 2026-Q4 (± six months) FETA stablecoin-as-payment-instrument amendment and decree Consultation · Tier 3 source Periodic update · new data 2026-10-25 #### Stablecoin Regime South Korea's stablecoin regime remains in a holding pattern defined by an unresolved institutional disagreement rather than by enacted law. Domestic stablecoin issuance is not currently permitted, a consequence of the operative ICO ban that predates the current legislative effort, and the government is reported to be weighing a narrower interim path that would permit circulation, though not domestic issuance, of overseas-issued stablecoins, conditioned on the issuer being licensed to international standards and maintaining a domestic branch. This interim approach, if adopted, would effectively import foreign-regulated stablecoins into the Korean market ahead of any domestic issuance framework coming into force, a sequencing that is itself notable given how many jurisdictions have approached stablecoin regulation by establishing domestic issuance rules first. The structural obstacle to a fuller domestic regime continues to be the standoff between the Bank of Korea and the Financial Services Commission over who should be permitted to issue a won-denominated stablecoin. The Bank of Korea favours a model requiring majority bank ownership of any issuer, consistent with its institutional interest in maintaining monetary-policy transmission and payment-system stability through regulated depository institutions. The Financial Services Commission favours broader fintech participation, reflecting its mandate to encourage competition and innovation in the digital-asset space. This disagreement is reported as the principal reason the Digital Asset Basic Act's stablecoin provisions remain delayed, and it has now persisted long enough to be the single most consequential open variable for the eventual shape of South Korea's stablecoin-issuance market. A further structural tightening indicator from the regulatory side is the Bank of Korea's 24 October 2026 disclosure that it is building, jointly with the government, an international cooperation framework to monitor and combat illegal cross-border virtual-asset flows. While this initiative is framed primarily as a cross-border monitoring and enforcement-coordination measure, it is directly relevant to the stablecoin regime because stablecoins are among the most commonly used instruments for cross-border virtual-asset movement, and any monitoring framework targeting such flows will necessarily touch on stablecoin transactions moving into and out of Korean won. The Financial Services Commission Chairman's confirmation of the initiative the day before the Bank of Korea's own announcement indicates at least surface-level institutional alignment on this particular initiative, even as the deeper stablecoin-issuer-eligibility disagreement between the two bodies remains unresolved. A previously reported proposal, traceable to a January 2026 government growth-strategy announcement rather than to current bill text, would require stablecoin issuers to maintain reserve assets at or above 100% of outstanding issuance, paired with a redemption right and issuance-licensing capital requirements. This proposal has not been enacted and its current status within the Digital Asset Basic Act's Phase 2 drafting process was not established, but a 100% reserve requirement, if it survives into enacted law, would place South Korea's prudential stablecoin standard at the stricter end of comparable international approaches. The Digital Asset Basic Act's Phase 2 is expected to be submitted to the National Assembly's bill-review panel in November 2026, with the Financial Services Commission targeting completion of the overall framework by the end of 2026. Ten related bills are already pending before the Assembly, which signals substantial legislative appetite but also raises the practical question of how a consolidated framework will reconcile those pending proposals with the Bank of Korea / Financial Services Commission ownership-structure disagreement that has not yet been resolved at the policy level. #### Outlook The clearest marker to track is whether the Digital Asset Basic Act's Phase 2 bill, once submitted to the National Assembly's bill-review panel as expected in November 2026, resolves the Bank of Korea / Financial Services Commission disagreement over stablecoin-issuer ownership in favour of one institution's preferred model, adopts some hybrid structure, or leaves the question open for further rulemaking. A second marker is whether the reported 100% reserve-requirement proposal, still untethered from bill text, is formally incorporated into the Phase 2 bill or dropped in favour of a different prudential standard. A third marker, tied closely to the cross-border transfer domain, is whether the Bank of Korea's international cooperation framework for monitoring illegal cross-border virtual-asset flows is extended with specific reference to stablecoin transaction types, which would signal that stablecoin-specific cross-border monitoring is being treated as a priority within the broader framework. Periodic update · new data 2026-10-18 #### Stablecoin Regime South Korea's stablecoin regime sits in an unresolved legislative gap. The Act on the Protection of Virtual Asset Users (VAUPA) does not directly regulate the structure of stablecoin issuance; comprehensive second-phase legislation intended to govern the issuance and distribution of stablecoins, including reserve-asset requirements, remains under discussion between the Financial Services Commission and the National Assembly, with no confirmed timeline for submission or passage as of 5 October 2026. In the absence of a dedicated statutory framework, the Financial Services Commission has instead relied on supervisory advisory tools: on 16 October 2026 it issued user advisories warning against perpetual futures products carrying leverage of ten to two hundred times, tied to virtual assets and stocks and offered through overseas platforms. This advisory activity illustrates the regulator's current posture toward unregistered or offshore high-leverage digital-asset products in a period where the underlying legislative framework for stablecoins and comparable instruments has not yet been settled. The gap between the in-force VASP/VAUPA user-protection baseline and the still-pending Phase-2 stablecoin-specific legislation means that stablecoin issuers, reserve requirements and issuer-eligibility criteria remain unsettled matters for market participants operating in or targeting the Korean market. #### Outlook The stablecoin regime's near-term trajectory is tied entirely to the progress of the Phase-2 Digital Asset Basic Act through the National Assembly; without confirmed submission and passage, reserve-asset and issuer-eligibility requirements for stablecoins will remain unsettled. In the interim, the Financial Services Commission's advisory-based approach to perimeter-policing high-leverage derivative products suggests continued reliance on supervisory warnings rather than binding rules for stablecoin-adjacent product categories until the legislative gap closes. C4 · Stablecoins & EMTs — Full Module Record 0 sub-modules · 180 words · 13 traced claims · Re-verified 2026-11-04 The decision headline, regulatory posture (Red), primary framework, and supervisory authority above are open on the Free Explore layer. Register free with a business email for 3 full-record passes a month , or unlock all 170 jurisdictions with Pro (£39/mo · £99/mo all products) or Firm (£199/mo · £449/mo all products) . [Unlock with Free Pass / Sign In](https://a-i.gi/auth/login)[View Pro & Firm Plans (£39 / £199)](https://a-i.gi/licensing/#plans)[View Open Exemplar (Gibraltar)](/jurisdictions/gi/) ### South Korea: C5 Consumer ProtectionAmberEnacted in forceModule confidence: Probable▾ Core VAUPA custody segregation (80% cold storage), bank-delegated cash custody, and insurance/reserve-fund protections are in force and enforced. An April 2026 mandatory withdrawal-delay order targets voice-phishing fraud, while a drafted 5%-of-equity institutional crypto-allocation cap remains at guideline stage. #### Consumer Protection Korea's core consumer-protection framework, the Virtual Asset User Protection Act (VAUPA), has been in force since 19 July 2024 and is actively enforced. It requires exchanges to keep at least 80% of user crypto deposits in segregated cold storage (CLM-KR-f2b9d6a5), to delegate cash-deposit custody to a licensed local bank while maintaining cryptocurrency reserves matched to customer deposits (CLM-KR-a3c7e4f9), and to enroll in adequate insurance or establish a reserve fund against hacking or liquidity-crisis losses (CLM-KR-b4d8f1e6). This baseline has been supplemented rather than replaced: in April 2026 the FSC and Financial Supervisory Service ordered all domestic exchanges to adopt a unified mandatory withdrawal-delay system specifically to counter voice-phishing fraud (CLM-KR-c5e9a2d3), extending the consumer-protection perimeter into fraud-prevention mechanics rather than custody or capital adequacy. A separate suitability-style measure remains at guideline stage: the FSC has drafted rules that would cap listed-company and professional-investor crypto allocations at 5% of equity capital annually, limited to the top 20 cryptocurrencies by market value (CLM-KR-d6f1b3a8). This measure targets institutional exposure rather than retail custody risk and has not yet moved beyond proposal status. #### Outlook The custody, insurance and now anti-fraud protections form a stable and enforced core that is unlikely to be materially disturbed by DABA's eventual passage; DABA is expected to layer additional licensing obligations on top of, rather than replace, VAUPA's consumer-facing protections. The 5% institutional-allocation cap is the one open consumer-protection-adjacent question this cycle, and its progression from guideline to binding rule would be a meaningful tightening signal for institutional market participants specifically, distinct from the retail-facing custody regime already in force. Read full sub-brief · 261 words Periodic update · new data 2026-10-12 #### Consumer Protection Korea's consumer-protection framework for virtual-asset users rests on the Virtual Asset User Protection Act's (VAUPA) requirements for custody segregation and information-security standards, which VASPs must maintain alongside their KoFIU registration. This cycle's signal in this module is an escalating enforcement trajectory: the Financial Intelligence Unit found KYC and custody-adjacent compliance failures at three of Korea's largest exchanges during 2025-2026, resulting in fines and partial-suspension sanctions at each. Bithumb was fined approximately $24 million with a six-month partial suspension, disclosed 16 March 2026, following an on-site inspection; this is the most recent and highest-profile of the three actions, and it is Probable-confidence given its Tier-3 sourcing. A structurally significant absence in Korea's current consumer-protection framework is the lack of a dedicated market-abuse or market-integrity regime comparable to MiCA's Title VI. Market-abuse-type provisions for digital assets are expected only via the pending Digital Asset Basic Act; under current law, no equivalent framework is in force. This is treated as a negative finding with Uncertain confidence, since the absence is inferred from commentary discussing DABA's prospective scope rather than confirmed against a specific statute that defines the current gap. The custody-segregation and information-security obligations that are in force represent baseline user protection; the market-abuse and broader conduct-of-business rules that would typically accompany those baseline protections in a comprehensive regime remain pending. The pattern across Upbit, Bithumb and Korbit — repeated KYC and custody-adjacent findings resulting in sanctions across a roughly twelve-month period — indicates that Korea's existing consumer-protection enforcement machinery is active and is identifying real compliance gaps at scale, even while the more comprehensive market-conduct framework contemplated under DABA remains unenacted. #### Outlook Continued enforcement activity against Korea's major exchanges is likely to persist under the existing VAUPA framework regardless of DABA's legislative timeline, since custody-segregation and KYC obligations are already in force and already being actively supervised. The market-abuse gap, by contrast, will persist until DABA or an equivalent instrument is enacted; no interim market-abuse measure under current law was identified this cycle. Sources and findings (7) - T4 · The Block[Virtual Asset User Protection Act (VAUPA)](https://www.theblock.co/post/306169/south-korea-inaugural-crypto-law-goes-into-full-effect) — safekeeping of at least 80% of user crypto deposits in segregated cold storage - T4 · The Block[Virtual Asset User Protection Act (VAUPA)](https://www.theblock.co/post/306169/south-korea-inaugural-crypto-law-goes-into-full-effect) — exchanges to delegate cash-deposit custody to a licensed local bank and maintain cryptocurrency reserves matched to customer deposits - T4 · The Block[Virtual Asset User Protection Act (VAUPA)](https://www.theblock.co/post/306169/south-korea-inaugural-crypto-law-goes-into-full-effect) — crypto service providers to enroll in adequate insurance or establish a reserve fund against hacks or liquidity crises - T4 · CoinDesk[FSC / Financial Supervisory Service (FSS)](https://www.coindesk.com/policy/2026/04/08/south-korea-proposes-cryptocurrency-law-with-bank-style-rules-for-stablecoins) — all domestic cryptocurrency exchanges to adopt a unified mandatory withdrawal-delay system to counter voice-phishing fraud - T4 · CoinDesk[Financial Services Commission (FSC)](https://www.coindesk.com/markets/2026/01/12/south-korea-proposes-5-limit-for-listed-firms-crypto-exposure) — guidelines capping listed-company and professional-investor crypto allocations at 5% of equity capital annually, limited to the top 20 cryptocurrencies by market value - T3[Virtual Asset User Protection Act (VAUPA)](https://www.trmlabs.com/resources/blog/the-state-of-korean-digital-asset-compliance-while-the-basic-act-waits) — VASPs must keep customer deposits at banks, segregate customer assets, and carry insurance or reserves against hacking incidents, in force since 2024-07-19. - T3[Virtual Asset User Protection Act](https://www.trmlabs.com/resources/blog/the-state-of-korean-digital-asset-compliance-while-the-basic-act-waits) — Comprehensive market-conduct regime in force since 19 July 2024, introducing custody segregation and unfair-trading prohibitions; pinpoint article/paragraph not located this cycle. ### South Korea: C6 Tax TreatmentAmberEnacted in forceModule confidence: Probable▾ The 2027 crypto income tax (20%/22% 'other income' above a 2.5 million won deduction) is enacted but not yet effective, and faces an active repeal bill referred to a National Assembly subcommittee on 29 July 2026 -- the third such delay effort since 2022. A separate, unresolved question is whether tokenized stocks will be taxed as securities under the Capital Markets Act pending FSC concurrence with the Ministry of Economy and Finance. C6 · Tax Treatment — Full Module Record 0 sub-modules · 180 words · 5 traced claims · Re-verified 2026-11-04 The decision headline, regulatory posture (Amber), primary framework, and supervisory authority above are open on the Free Explore layer. Register free with a business email for 3 full-record passes a month , or unlock all 170 jurisdictions with Pro (£39/mo · £99/mo all products) or Firm (£199/mo · £449/mo all products) . [Unlock with Free Pass / Sign In](https://a-i.gi/auth/login)[View Pro & Firm Plans (£39 / £199)](https://a-i.gi/licensing/#plans)[View Open Exemplar (Gibraltar)](/jurisdictions/gi/) ### South Korea: C7 Cross-Border TransferAmberEnacted in forceModule confidence: Probable▾ The FTRA Travel Rule (in force since March 2022, threshold 1,000,000 won) is set for possible threshold removal per FSC plans. A May 2026 Foreign Exchange Transactions Act amendment adds a cross-border virtual-asset-transfer-business registration requirement, enacted but with an effective date not yet established from available sourcing; the Bank of Korea has separately planned (not yet in force) monthly cross-border transaction reporting. Horizon · 2026-12-01 (± a quarter) FETA cross-border virtual-asset transfer-firm registration takes effect Adopted, not yet in force · Tier 4 source Periodic update · new data 2026-10-25 #### Cross-Border Transfer The Bank of Korea's 24 October 2026 disclosure marks the most significant development in South Korea's cross-border virtual-asset transfer regime. The central bank announced it is building, jointly with the government, an international cooperation framework to monitor and combat illegal cross-border digital-asset and stablecoin flows. The stated mechanism for implementing this framework is a planned revision of the Foreign Exchange Transactions Act, which the Bank of Korea indicates would introduce real-time information-sharing and enforcement-coordination arrangements with foreign authorities. The Financial Services Commission Chairman, Lee Eog-weon, separately confirmed the initiative on 23 October 2026, the day before the Bank of Korea's own disclosure, indicating a degree of coordinated messaging between the two institutions on this specific initiative. What remains unestablished, and is flagged as a research gap, is whether the Foreign Exchange Transactions Act revision has progressed beyond the announcement stage into formal drafting. No draft legislative text, proposed thresholds for reportable cross-border virtual-asset transactions, or an expected effective date has been located. This places the initiative squarely at the announcement stage of the regulatory-development lifecycle: the policy direction and the responsible institutions are clear, but the operative legal mechanics are not yet public. The current legal baseline against which this revision would operate is the existing Foreign Exchange Transactions Act, which already governs cross-border capital-flow reporting in South Korea generally, but which was not designed with virtual-asset-specific cross-border flows as its primary subject. The planned revision, as described, would adapt this existing framework specifically to address virtual-asset and stablecoin cross-border movement, rather than creating an entirely new standalone instrument. This is a meaningful distinction: amending an existing, well-established foreign-exchange law is likely to proceed on a different, potentially faster, legislative track than introducing new primary legislation, though the precise procedural path for this particular revision was not established. The framing of the initiative, explicitly directed at combating illegal cross-border flows rather than at establishing a general reporting regime for all cross-border virtual-asset transfers, suggests the revision is likely to be targeted at enforcement and monitoring capability rather than at creating new compliance burdens for routine, lawful cross-border virtual-asset activity. That said, without visibility into draft text, this characterisation should be treated as an inference from the Bank of Korea's own framing rather than as an established feature of the eventual legal instrument. #### Outlook The principal marker to track for this domain is whether the Bank of Korea's Foreign Exchange Transactions Act revision moves from announcement to a formally published draft, at which point its scope, reportable-transaction thresholds, and proposed effective date would become assessable. A second marker is whether the cross-border monitoring framework described by the Bank of Korea is extended or cross-referenced within the Digital Asset Basic Act's Phase 2 legislative process, which would indicate the two workstreams, cross-border transfer monitoring and the core stablecoin-issuance framework, are being coordinated at the drafting stage rather than developed on separate, potentially inconsistent timelines. Periodic update · new data 2026-10-12 #### Cross-Border Transfer Korea's cross-border virtual-asset transfer regime is tightening structurally under an Enforcement Decree amendment to the Act on Reporting and Using Specified Financial Transaction Information. The amendment establishes a risk-tiered framework for transfers from domestic VASPs to overseas counterparties: transfers to overseas VASPs classified as low-risk are permitted without further restriction; transfers to other overseas VASPs, or to self-hosted wallets, are permitted only where the sender and recipient are confirmed to be the same person; and transfers to high-risk counterparties are prohibited outright. This risk-tiered structure commences alongside the zero-threshold domestic Travel Rule change, approximately six months after the decree's promulgation on 18 August 2026, placing the effective date around 19-20 February 2027. A related provision requires domestic VASPs to apply internal suspicious-transaction monitoring for cross-border transfers of KRW 10 million or more to overseas VASPs or self-hosted wallets. Notably, an earlier draft of this provision reportedly contained a mandatory suspicious-transaction-report trigger at this threshold, but the final decree softened this to a provider-operated monitoring-system requirement rather than an automatic reporting obligation. This softening is a meaningful detail: it indicates the final rule gives VASPs more operational discretion in how they structure their cross-border monitoring systems than the mandatory-STR approach initially contemplated. Confidence in both the risk-tiered structure and the monitoring threshold is Probable, since no direct primary fsc.go.kr or kofiu.go.kr notice for the Enforcement Decree amendment was retrieved this cycle; coverage instead relies on multiple Tier-3 crypto-compliance trade-press sources that corroborate each other on the substance of the change. #### Outlook The period to February 2027 is the implementation window for VASPs to build the risk-tiering and KRW 10 million monitoring-threshold systems this regime requires. The same-person-confirmation requirement for self-hosted-wallet transfers in particular represents an operationally demanding compliance burden, since it requires VASPs to verify counterparty identity for an entire category of transfers that previously required no such verification under the de minimis exemption. C7 · Cross-Border & Travel Rule — Full Module Record 0 sub-modules · 180 words · 5 traced claims · Re-verified 2026-11-04 The decision headline, regulatory posture (Amber), primary framework, and supervisory authority above are open on the Free Explore layer. Register free with a business email for 3 full-record passes a month , or unlock all 170 jurisdictions with Pro (£39/mo · £99/mo all products) or Firm (£199/mo · £449/mo all products) . [Unlock with Free Pass / Sign In](https://a-i.gi/auth/login)[View Pro & Firm Plans (£39 / £199)](https://a-i.gi/licensing/#plans)[View Open Exemplar (Gibraltar)](/jurisdictions/gi/) ### South Korea: C8 AML/CFT RegimeGreenEnacted in forceModule confidence: Probable▾ This module is intentionally unpopulated with original claims. AML/CFT surface coverage for Korea -- including Travel Rule administration and FIU KYC/STR enforcement -- is subscribed from the financial-integrity monitor pending fleet-wide consolidation, and is carried here as a placeholder only. Horizon · 2027-02-19 (± a quarter) KR crypto Travel Rule zero-threshold transfer provisions commence Adopted, not yet in force · Tier 3 source C8 · AML/CFT Regime — Full Module Record 0 sub-modules · 180 words · 4 traced claims · Re-verified 2026-11-04 The decision headline, regulatory posture (Green), primary framework, and supervisory authority above are open on the Free Explore layer. Register free with a business email for 3 full-record passes a month , or unlock all 170 jurisdictions with Pro (£39/mo · £99/mo all products) or Firm (£199/mo · £449/mo all products) . [Unlock with Free Pass / Sign In](https://a-i.gi/auth/login)[View Pro & Firm Plans (£39 / £199)](https://a-i.gi/licensing/#plans)[View Open Exemplar (Gibraltar)](/jurisdictions/gi/) ### South Korea: C9 Commercial Activity unpopulated ▾ ## Commercial Activity Three distinct commercial developments mark an escalating pattern of consolidation and infrastructure investment in Korea's crypto sector this cycle. Hana Bank disclosed what is reported as an acquisition of an approximately $670 million stake in Dunamu, the operator of the Upbit exchange; the stage is announced/disclosed, with the amount reported in press coverage rather than confirmed via a company filing, and confidence is accordingly Uncertain. Separately, Kiwoom Securities reportedly entered negotiations — at the rumoured stage — to acquire a stake in Bithumb Korea Co., Ltd. via third-party new-share allocation; neither the investment size nor the resulting stake percentage has been disclosed, and this item carries Uncertain confidence given its rumoured status. The third development is BTQ Technologies' naming as security partner for MoonPay Korea's won-stablecoin infrastructure, applying post-quantum cryptography across issuance, distribution, self-custody wallets, settlement and merchant delivery; Woori Bank is the inaugural member of MoonPay Korea's KRW Stablecoin Consortium. This was announced 9 October 2026, with deal value not disclosed; confidence is Probable, reflecting press-release-sourced reporting via a trade outlet. Taken together, these three items show capital and infrastructure commitments flowing into Korea's crypto sector from multiple directions simultaneously: a major bank taking an equity position in an established exchange, a securities brokerage reportedly pursuing a stake in a second major exchange, and a stablecoin-infrastructure security partnership backed by a third bank. This is well-sourced, active commercial consolidation activity, even though two of the three items (the Hana Bank/Dunamu stake and the Kiwoom/Bithumb negotiation) rest on press reporting rather than confirmed company filings. — Outlook: Further disclosure or confirmation of deal terms for the Hana Bank/Dunamu stake and the Kiwoom Securities/Bithumb negotiation would be the natural next development to watch, given that both currently rest on unconfirmed or rumoured reporting. The broader pattern of traditional-finance entry into crypto-exchange ownership and stablecoin infrastructure is likely to continue given the multiple parallel tracks already visible this cycle. Open gap — crypto-int-2 No material KR crypto-sector commercial event (M&A, investment, JV, partnership, product launch) located this cycle; no dedicated deal-data vendor search was run. no under-indexing note recorded No periodic updates recorded in this cycle Sources and findings (5) - T3[Hana Bank / Dunamu](https://www.theblock.co/post/406470/kiwoom-securities-bithumb) — Commercial event: Hana Bank disclosed a reported acquisition of a ~$670 million stake in Dunamu (Upbit operator); stage = announced/disclosed; amount reported, not confirmed via a company filing. (2× uses collapsed) - T3[Kiwoom Securities / Bithumb](https://cryptobriefing.com/kiwoom-securities-bithumb-stake-acquisition/) — Commercial event: Kiwoom Securities entered negotiations (reported, stage = rumoured/in talks) to acquire a stake in Bithumb via third-party new-share allocation; investment size and resulting stake percentage undisclosed. - T3[BTQ Technologies / MoonPay Korea](https://basisdesk.news/news/btq-technologies-moonpay-korea-quantum-stablecoin-security) — Commercial event: BTQ Technologies (incorporated outside KR) named security partner for MoonPay Korea's won-stablecoin infrastructure (post-quantum cryptography); Woori Bank (KR) is the inaugural member of MoonPay Korea's KRW Stablecoin Consortium; announced 9 Oct 2026; deal value not disclosed. - T3[Dunamu (Upbit) and Visa](https://www.crowdfundinsider.com/tag/south-korea/) — Dunamu and Visa formed a strategic alliance to build new payment and financial products at the intersection of stablecoins, cross-border transfers and AI, presented as a joint roadmap at a Visa global event; announced partnership, no disclosed contract value.