Key Takeaways
- Institutional bans on crypto may be lifted and pave the way for spot Bitcoin ETFs in South Korea.
- South Korea may implement policies to tax crypto gains over 2.5 million won at a flat income tax rate of 20%.
- South Korea’s first crypto legislation was passed in 2023 and came into effect in July 2024.
South Korea’s burgeoning crypto sector could face more regulatory delays as the nation’s Financial Services Commission (FSC) second Virtual Asset Committee meeting falls short of the crypto community’s expectations.
On the contrary, the FSC has delayed formalizing the much-anticipated approval of corporate virtual asset trading accounts but will be introducing legislation to further crypto investor protections.
Crypto Regulation Delays
According to local media, the FSC’s second Virtual Asset Committee meeting focused on establishing greater safeguards for crypto investors.
However, the regulator appears to be taking a cautious approach, as it has postponed its decision on whether or not to allow corporate accounts on crypto asset exchanges.
That said, FSC Vice Chairman Kim So-young said:
“The issue of allowing accounts for corporations, which was discussed previously, has undergone extensive review through twelve subcommittee and task force discussions”
“The policy review process is nearing completion. We will report the results soon and proceed with the subsequent steps promptly,” Kim added.
Giving corporations the green light to open crypto accounts would be a major step toward giving South Korean institutions access to cryptocurrencies.
Such developments could open up major business and economic opportunities in the nation, such as crypto investment products, commercial crypto payments, and other ventures.
Excitingly, this could end the institutional ban on crypto, which may lead to the creation of spot Bitcoin (BTC) exchange-traded funds (ETFs) by the end of 2025.
Phase Two
The second phase of the legislation will discover regulatory gaps, such as crypto asset reporting standards, and will work to establish a separate framework for business and commercial stablecoin transactions.
“We are officially beginning discussions on the second phase of the law. A comprehensive and systematic approach encompassing businesses, markets, and users is necessary,” Kim noted.
South Korea’s crypto scene is bustling, though, despite this, the nation’s regulators have opted for a slow and steady approach to formulating legislation around crypto.
However, it would appear that 2025 will be a decisive year for the nation’s tech industries as crypto regulations and AI legislation take center stage.
Eddie is a gaming and crypto writer at CCN. Covering the often weird and wonderful world of Web3 with an adoring, but skeptical eye.
Prior to CCN, Eddie has spent the past seven years working his way through the crypto, finance, and technology industry. He began with PR and journalism with Bitcoin PR Buzz and BitcoinNews.com, eventually working his way to become a copywriter with a dozen firms, including the likes of Polkadot before returning to journalism in 2023.
Having studied Radio production and journalism at University in the UK, Eddie spent a few years making podcasts and presenting on a local London radio station as he built up his writing chops.
A lifelong skateboarder, Eddie can often be found at the skatepark or touring the streets looking for something new to try. That, or kicking back playing JRPGs on his original PSP.
