South Korea has begun talks to draft the second phase of its cryptocurrency regulatory framework, targeting legislation in the second half of 2025.
South Korea to Develop New Crypto Law by Second Half of 2025
South Korea’s top financial regulator, the Financial Services Commission (FSC), held a meeting on Wednesday to outline focus areas for the upcoming legislation.
FSC Vice Chairman Kim So-young emphasized that leading global economies are improving crypto regulations to protect investors and reduce regulatory uncertainty, and stressed the importance of South Korea following suit.
The country’s first crypto regulatory framework, which came into effect in July 2024, introduced robust investor protections. Key measures included requiring exchanges to keep at least 80% of user funds in cold storage, separate from their own reserves.
In the second phase, the FSC aims to take a “comprehensive and systematic approach”, addressing not only service providers but also market operations and user protections.
Key Areas to Focus on
Issues considered for the new framework include:
- Transparency in Crypto Listings: Improving disclosures for newly listed digital assets.
- Regulatory Parity with Traditional Finance: Applying the same disclosure requirements to crypto assets as seen in traditional finance sectors.
- Stablecoin Oversight: Review of global practices for reserve asset management and user redemption rights.
With the upcoming framework, South Korea aims to strike a balance between encouraging innovation and providing strong investor protection, while aligning itself with global regulatory trends.
*This is not investment advice.
