South Korea, a top crypto market, will revamp regulations with stricter KYC and institutional trading rules in 2025 with a new framework to boost transparency.
With comprehensive KYC reforms, plans to end the ban on institutional crypto investments, and a tokenized securities bill under review, South Korea is signaling a major policy shift.
Crypto Regulation in South Korea
The South Korean government recently implemented stricter KYC rules for crypto exchanges and banks after the Financial Intelligence Unit (FIU) detected up to 600,000 potential KYC violations at Upbit.
These reforms aim to enhance transparency and security, paving the way for lifting the institutional crypto investment ban in place since 2017, as outlined by the Financial Services Commission (FSC).
The National Assembly is also evaluating a tokenized securities bill, which is expected to pass post-presidential election, to create a legal framework for blockchain-based securities trading.
This would be a key step toward integrating digital assets into traditional finance.
A notable milestone occurred recently when World Vision Korea became the first nonprofit to sell 0.55 ETH on Upbit, linking its K-Bank corporate account to the exchange. This transaction, announced by Upbit, enhances market liquidity and boosts investor confidence.
“World Vision linked its K-Bank corporate account to its Upbit account and successfully sold the Ethereum it received as donations through the Upbit KRW market,” Upbit’s announcement stated.
By Q3 2025, listed companies and professional investors are expected to be allowed to trade cryptocurrencies, marking a significant shift from the seven-year ban.
The FSC is also rolling out the second phase of the Virtual Asset User Protection Act, targeting stablecoin regulation and tougher exchange standards to prevent unfair trading and protect user assets.
Bloomberg notes that South Korea’s crypto sector will likely thrive regardless of the presidential election outcome, with the Democratic Party of Korea (DPK) and the People Power Party (PPP) supporting market growth. The DPK promotes spot Bitcoin ETFs, while the PPP focuses on a digital asset promotion committee and tax framework.
