South Korea’s prime monetary regulator is signaling a possible coverage shift that might permit international traders to entry the home cryptocurrency market, supplied that native exchanges meet strict anti-money laundering (AML) necessities.
Talking at a seminar hosted on the Nationwide Meeting on Wednesday, Kim Sung-jin, head of the digital asset division on the Monetary Providers Fee (FSC), expressed help for allowing abroad participation in South Korea’s crypto ecosystem.
In accordance with native media outlet Bloter, Kim mentioned he “agrees with” the thought of opening the market to international traders and famous that the fee is exploring strategies to draw world capital.
International Traders Nonetheless Locked Out of Korean Crypto Market As a result of Strict KYC Guidelines
At present, international traders are barred from buying and selling on South Korean crypto exchanges resulting from stringent know-your-customer (KYC) rules.
These embody a requirement for customers to hyperlink their change accounts to native financial institution accounts registered underneath their actual names—a coverage that excludes non-residents.
“Korea imposes capital account restrictions — management over portfolio investments,” mentioned Peter Chung, Head of Analysis at Presto Analysis.
“Permitting foreigners to commerce crypto on Korean exchanges would mute such restrictions.”
South Korea’s potential coverage shift comes amid rising world competitors in crypto innovation, significantly led by the U.S. underneath President Trump’s administration.
Chung believes that opening the market may energize South Korea’s crypto sector and help the growth of USD-based stablecoins within the area.
JUST IN: South Korea could permit international traders in its crypto market if AML guidelines are strengthened. pic.twitter.com/smQ0MtUQCU
— Coin Bureau (@coinbureau) April 3, 2025
Moreover, it may assist remove the so-called “Kimchi Premium”—a phenomenon the place cryptocurrencies commerce at larger costs on Korean exchanges resulting from restricted international liquidity.
Nonetheless, regulatory readiness stays a key hurdle. South Korean regulators have lengthy voiced considerations in regards to the AML capabilities of native exchanges.
Kim’s remarks counsel that whereas the FSC is open to alter, it’s going to solely proceed if exchanges can show sturdy compliance.
In March 2022, South Korea carried out the Journey Rule, an AML measure aligned with the Monetary Motion Activity Power (FATF) tips.
This rule requires exchanges to gather and retain info on each senders and recipients of crypto transfers exceeding a million gained (roughly $680).
Main exchanges have since introduced plans to increase the Journey Rule to smaller transactions.
Upbit Faces Regulatory Scrutiny Over International Transactions, Superb Suspended by Court docket
Regardless of regulatory efforts, challenges persist.
Earlier this 12 months, the Monetary Intelligence Unit imposed a high quality on Upbit, the nation’s largest change, for allegedly processing transactions with unregistered international platforms. The penalty has since been placed on maintain following a court docket injunction.
Extra lately, South Korean prosecutors launched a proper investigation into Bithumb, one of many nation’s largest cryptocurrency exchanges, over allegations that firm funds had been misused to facilitate an condo buy for its former CEO.
The Seoul Southern District Prosecutors’ Workplace additionally executed a search and seizure operation at Bithumb’s headquarters in Yeoksam-dong.
Authorities suspect that Bithumb supplied a 3 billion Korean gained (roughly $2.4 million) lease deposit for an condo in Seongsu-dong to its former CEO and present advisor, Kim Dae-sik.
South Korea stays a serious participant within the world crypto area, with March information exhibiting that Upbit alone dealt with over $85 billion in buying and selling quantity.
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