South Korea’s Financial Services Commission (FSC) has initiated discussions to draft the second phase of its crypto regulatory framework, aiming to finalize the legislation in the second half of 2025, according to local reports.
At a meeting on Wednesday, FSC Vice Chairman Kim So-young emphasized the growing global push for crypto regulations to enhance investor protection and reduce regulatory uncertainty. He noted that major economies are advancing their regulatory efforts, and South Korea must stay competitive.
The country’s first crypto regulatory framework, implemented in July 2024, introduced stricter requirements for exchanges, including a rule mandating 80% of user crypto deposits to be stored in cold wallets, separate from company funds. The goal was to safeguard investor assets and improve market stability.
The FSC’s follow-up framework aims to take a comprehensive approach that covers crypto service providers, users, and the broader market. Key areas of focus include:
Transparency in crypto listings on exchanges, Disclosure requirements for crypto companies, similar to those in traditional finance, Stablecoin regulation, with reviews of reserve asset management practices and user redemption rights.
The meeting also highlighted South Korea’s significant role in the global crypto market. The local exchange Upbit ranked as the third-largest centralized exchange by trading volume in December 2024, reflecting the country’s active participation in the digital asset space.
South Korean regulators aim to align the new framework with global best practices while addressing emerging risks to ensure a safe and transparent crypto market.
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