South Korean crypto emerges from failed coup into crackdown season
South Korea kicked off 2025 with political chaos, regulatory heat and a crypto market finally brought to heel — or at least forced to grow up.
The nation closed 2024 in disarray following then-President Yoon Suk Yeol’s botched martial law stunt in December.
In the aftermath, authorities spent the first quarter drawing lines in the sand as financial watchdogs slapped cryptocurrency exchanges with probes and lifted the ban on corporate trading accounts. Meanwhile, crypto adoption hit record highs as trading volume cooled.
Here’s a breakdown of the key developments that shaped South Korea’s crypto sector in Q1 of 2025.
South Korean crypto traders given yet another two-year tax exemption
Jan. 1 — Crypto tax postponed
A planned 20% capital gains tax on crypto did not take effect on Jan. 1 after lawmakers agreed to delay it until 2027. This was the third postponement: first from 2022 to 2023, then again to 2025.
Related: Crypto’s debanking problem persists despite new regulations
The latest delay, reached through bipartisan consensus in late 2024, came amid mounting economic uncertainty and political turmoil. Lawmakers cited fears of investor flight to offshore exchanges, challenges in tracking wallet-based profits, and shifting national priorities in the wake of Yoon’s failed martial law stunt and subsequent impeachment.
Jan. 14 — Warning against North Korean crypto hackers
The US, Japan and South Korea published a joint statement on North Korean crypto hacks. Crypto firms were warned to guard against malware and fake IT freelancers. Lazarus Group, the state-sponsored cyber threat group, was named as a prime suspect in some of the top hacks in 2024, such as the $230-million hack on India’s WazirX and the $50-million hack against Upbit, South Korea’s largest crypto exchange.
Jan. 15 — Companies wait on the sidelines for crypto greenlight
South Korea’s Virtual Asset Committee, a crypto policy coordination body under the Financial Services Commission (FSC), held its second meeting. The FSC was widely expected to approve corporate access to trading accounts on local exchanges. Despite popular demand, the FSC held off on making an official decision, citing the need for further review.
Instead, the FSC announced investor protections against price manipulation and stricter stablecoin oversight.
Jan. 16 — First enforcement of crypto market manipulation
South Korean authorities indicted a trader in the first pump-and-dump prosecution under the Virtual Asset User Protection Act, the new crypto law effective from July 2024.
Meanwhile, Upbit received a suspension notice for allegedly violating Know Your Customer (KYC) requirements in over 500,000 instances, prompting regulators to consider a ban on new user registrations.
Jan. 23 — Upbit, Bithumb compensate users after service outages during martial law
Upbit and rival exchange Bithumb announced plans to compensate users following service disruptions triggered by the surprise declaration of nationwide martial law on Dec. 3, 2024. The shocking move caused panic across financial and crypto markets, leading to a surge in traffic that overwhelmed local trading platforms.
South Korean crypto world finally opened to corporations
Feb. 13 — Charities and universities get first dibs on corporate crypto access
The FSC unveiled its long-awaited plan to allow corporate entities to open crypto trading accounts in phases by late 2025. The rollout will require businesses to use “real-name” accounts and comply with KYC and Anti-Money Laundering (AML) regulations. Charities and universities are first in line and will be allowed to sell their crypto donations starting in the first half of the year.
South Korea’s real-name financial transaction system, introduced in 1993, was designed to combat tax evasion and money laundering by requiring all bank accounts to be opened under verified legal names using national IDs.
Related: Market maker deals are quietly killing crypto projects
Crypto trading exploded in 2017, driven in part by anonymous accounts from businesses, foreigners and minors. Financial authorities responded by requiring crypto exchanges to partner with domestic banks and offer fiat services only through verified real-name accounts. To date, only five exchanges have met the requirements.
Since there was no regulatory framework for real-name corporate accounts, this policy effectively shut out both overseas users and domestic companies from trading on South Korean exchanges. The new roadmap aims to fix that by creating a formal structure for institutional participation under tighter compliance standards.
Feb. 21 — Alleged serial fraudster busted again
Police rearrested “Jon Bur Kim,” identified by the surname Park, for allegedly profiting 68 billion won (approximately $48 million) in a crypto scam involving the token Artube (ATT). He allegedly employed false advertising, pump-and-dump tactics and wash trading to manipulate the market.
This wasn’t Park’s first brush with the law. He was previously indicted in a 14-billion-won (around $10 million) token fraud case and was out on bail when he launched ATT.
Feb. 25 — Upbit operator Dunamu gets slapped
The nation’s Financial Intelligence Unit (FIU) formally notified Dunamu, operator of Upbit, of regulatory action. The sanctions were tied to KYC compliance failures and dealings with unregistered foreign exchanges. The FIU issued a partial business suspension, restricting Upbit from processing new customers’ deposits and withdrawals for three months.
Feb. 27 — Crypto crime force formalized
South Korean prosecutors formally launched the Virtual Asset Crime Joint Investigation Division, following a year and seven months as a temporary operation. As a non-permanent unit from July 2023, the task force indicted 74 individuals, secured 25 arrests, and recovered over 700 billion won (around $490 million) in illicit gains. The 30-person task force includes prosecutors, regulatory staff and specialists.
Feb. 28 — Upbit operator Dunamu files lawsuit to overturn business sanctions
Dunamu said it filed a lawsuit against the FIU to challenge the sanctions imposed on the exchange.
Bitcoin ETF next on checklist for South Korean crypto space
March 5 — Reconsidering Bitcoin ETF ban
The FSC started reviewing legal pathways to allow Bitcoin (BTC) spot exchange-traded funds (ETFs), citing Japan’s evolving regulatory approach as a potential model. This marks a notable shift from South Korea’s previous opposition to crypto-based ETFs.
The Capital Markets Act does not recognize cryptocurrencies as eligible underlying assets for ETFs. However, in 2024, lobbying efforts from major domestic brokerages intensified amid rising client demand, especially after spot Bitcoin ETFs were approved in the US.
While the review remains in its early stages, regulators are no longer dismissing the possibility outright.
March 21 — Crackdown on unregistered exchanges begins
The FIU compiled a list of illegal foreign exchanges and moved to block access via app stores and ISPs. Additionally, the agency warned of criminal penalties for trading platforms operating without a license.
March 26 — 17 exchange apps blocked (including KuCoin and MEXC)
Google Play removed 17 unlicensed crypto exchange apps in South Korea at the request of regulators. The FIU said it is also working with Apple to block unauthorized crypto platforms.
March 27 — Upbit scores three-month break
A South Korean court temporarily lifted the Feb. 25 partial business suspension imposed on crypto exchange Upbit by the FIU. The court’s decision allows Upbit to resume serving new users while the case is under review.
South Korean crypto expected to go from crackdown in Q1 to campaign trail in Q2
As March ended, more than 16 million investors — roughly a third of South Korea’s population — held crypto accounts, surpassing the 14.1 million domestic stock traders. But that surge in adoption came as trading activity cooled. Upbit, the country’s dominant exchange, saw volumes fall by 34%, dropping from $561.9 billion in Q4 2024 to $371 billion in Q1 2025, according to CoinGecko.
By mid-April, the crackdown was still gaining steam. Apple followed Google’s lead in removing offshore exchange apps from its store, while prosecutors filed yet another round of market manipulation charges.
South Korea’s crypto industry is now contending with tighter rules, rising institutional expectations and a government no longer content to watch from the sidelines.
All this unfolds ahead of an early presidential election in June, following Yoon’s impeachment. Crypto played a visible role in Yoon’s successful 2022 presidential election campaign and is expected to remain a key issue with voters.
One candidate in the upcoming election, former prosecutor Hong Joon-pyo of the People Power Party, recently pledged to overhaul crypto regulations in line with the pro-industry stance of the Trump administration, local media reported. Despite the pledge, Hong’s understanding of the technology came into question as he admitted to not knowing what a central bank digital currency is.
Magazine: Uni students crypto ‘grooming’ scandal, 67K scammed by fake women: Asia Express
The United States Securities and Exchange Commission (SEC) published a crypto wallet and custody guide investor bulletin on Friday, outlining best practices and common risks of different forms of crypto storage for the investing public.
The SEC’s bulletin lists the benefits and risks of different methods of crypto custody, including self-custody versus allowing a third-party to hold digital assets on behalf of the investor.
If investors choose third-party custody, they should understand the custodian’s policies, including whether it “rehypothecates” the assets held in custody by lending them out or if the service provider is commingling client assets in a single pool instead of holding the crypto in segregated customer accounts.
Crypto wallet types were also outlined in the SEC guide, which broke down the pros and cons of hot wallets, which are connected to the internet, and offline storage in cold wallets.
Hot wallets carry the risk of hacking and other cybersecurity threats, according to the SEC, while cold wallets carry the risk of permanent loss if the offline storage fails, a storage device is stolen, or the private keys are compromised.
The SEC’s crypto custody guide highlights the sweeping regulatory change at the agency, which was hostile to digital assets and the crypto industry under former SEC Chairman Gary Gensler’s leadership.
Related: SEC sends warning letters to ETF issuers targeting untamed leverage
The crypto community celebrates the SEC guide as a transformational change in the agency
“The same agency that spent years trying to kill the industry is now teaching people how to use it,” Truth For the Commoner (TFTC) said in response to the SEC’s crypto custody guide.
The SEC is providing “huge value” to crypto investors by educating prospective crypto holders about custody and best practices, according to Jake Claver, the CEO of Digital Ascension Group, a company that provides services to family offices.
SEC regulators published the guide one day after SEC Chair Paul Atkins said that the legacy financial system is moving onchain.
On Thursday, the SEC gave the green light to the Depository Trust and Clearing Corporation (DTCC), a clearing and settlement company, to begin tokenizing financial assets, including equities, exchange-traded funds (ETFs) and government debt securities.
Magazine: Unstablecoins: Depegging, bank runs and other risks loom
Greens leader Zack Polanski has rejected claims his party would push for open borders on immigration, telling Sky News it is “not a pragmatic” solution for a world in “turmoil”.
Mr Polanski distanced himself from his party’s “long-range vision” for open borders, saying it was not in his party’s manifesto and was an “attack line used by opponents” to question his credibility.
It came as Mr Polanski, who has overseen a spike in support in the polls to double figures, refused to apologise over controversial comments he made about care workers on BBC Question Time that were criticised across the political spectrum.
Mr Polanski was speaking to Sky News earlier this week while in Calais, where he joined volunteers and charities to witness how French police handle the arrival of migrants in the town that is used as a departure point for those wanting to make the journey to the UK.
He told Sky News he had made the journey to the French town – once home to the “Jungle” refugee camp before it was demolished in 2016 – to tackle “misinformation” about migration and to make the case for a “compassionate, fair and managed response” to the small boats crisis.
He said that “no manifesto ever said anything about open borders” and that the Greens had never stood at a general election advocating for them.
“Clearly when the world is in political turmoil and we have deep inequality, that is not a situation we can move to right now,” he said.
“That would also involve massive international agreements and cooperation. That clearly is not a pragmatic conversation to have right now. And very often the government try to push that attack line to make us look not pragmatic.”
The party’s manifesto last year did not mention open borders, but it did call for an end to the “hostile environment”, more safe and legal routes and for the Home Office to be abolished and replaced with a department of migration.
Asked why the policy of minimal restrictions on migration had been attributed to his party, Mr Polanski said open borders was part of a “long-range vision of what society could look like if there was a Green government and if we’d had a long time to fix some of the systemic problems”.
‘We should recognise the contribution migrants make’
Mr Polanski, who was elected Green Party leader in September and has been compared to Nigel Farage over his populist economic policies, said his position was one of a “fair and managed” migration system – although he did not specify whether that included a cap on numbers.
He acknowledged that there needed to be a “separate conversation” about economic migration but that he did not believe any person who boarded a small boat was in a “good situation”.
While Mr Polanski stressed that he believed asylum seekers should be able to work in Britain and pay taxes, he also said he believed in the need to train British workers in sectors such as care, where one in five are foreign nationals.
Asked what his proposals for a fair and managed migration system looked like, and whether he supported a cap on numbers, Mr Polanski said: “We have 100,000 vacancies in the National Health Service. One in five care workers in the care sector are foreign nationals.
Zack Polanski speaks to Sky News from a warehouse in Calais where charities and organisations provide migrants with essentials.
“Now, of course, that is both British workers and we should be training British workers, but we should recognise the contribution that migrants and people who come over here make.”
I’m not going to apologise’
Mr Polanski also responded to the criticism he attracted over his comments about care workers on Question Time last week, where he told the audience: “I don’t know about you, but I don’t particularly want to wipe someone’s bum” – before adding: “I’m very grateful for the people who do this work.”
His comments have been criticised by a number of Labour MPs, including Wes Streeting, the health secretary, who said: “Social care isn’t just ‘wiping someone’s bum’. It is a hard, rewarding, skilled professional job.
“This is immigration as exploitation.”
Read more:
The Greens leader who wants to be the Farage of the left
Will Farage racism allegations deter voters?
Asked whether he could understand why some care workers might feel he had talked down to them, the Greens leader replied: “I care deeply about care workers. When I made those comments, it’s important to give a full context. I said ‘I’m very grateful to people who do this important work’ and absolutely repeat that it’s vital work.”
“Of course, it is not part of the whole job, and I never pretended it was part of the whole job.”
Mr Polanski said he “totally” rejected the suggestion that he had denigrated the role of care workers in the eyes of the public and said his remarks were made in the context of a “hostile Question Time” where he had “three right-wing panellists shouting at me”.
Pressed on whether he wanted to apologise, he replied: “I’m not going to apologise for being really clear that I’m really grateful to the people who do this really vital work. And yes, we should be paying them properly, too.”
A group of crypto organizations has pushed back on Citadel Securities’ request that the Securities and Exchange Commission tighten regulations on decentralized finance when it comes to tokenized stocks.
Andreessen Horowitz, the Uniswap Foundation, along with crypto lobby groups the DeFi Education Fund and The Digital Chamber, among others, said they wanted “to correct several factual mischaracterizations and misleading statements” in a letter to the SEC on Friday.
The group was responding to a letter from Citadel earlier this month, which urged the SEC not to give DeFi platforms “broad exemptive relief” for offering trading of tokenized US equities, arguing they could likely be defined as an “exchange” or “broker-dealer” regulated under securities laws.
“Citadel’s letter rests on a flawed analysis of the securities laws that attempts to extend SEC registration requirements to essentially any entity with even the most tangential connection to a DeFi transaction,” the group said.
The group added they shared Citadel’s aims of investor protection and market integrity, but disagreed “that achieving these goals always necessitates registration as traditional SEC intermediaries and cannot, in certain circumstances, be met through thoughtfully designed onchain markets.”
Citadel’s ask would be impractical, group says
The group argued that regulating decentralized platforms under securities laws “would be impracticable given their functions” and could capture a broad range of onchain activities that aren’t usually considered as offering exchange services.
The letter also took aim at Citadel’s characterization that autonomous software was an intermediary, arguing it can’t be a “‘middleman’ in a financial transaction because it is not a person capable of exercising independent discretion or judgment.”
“DeFi technology is a new innovation that was designed to address market risks and resiliency in a different way than traditional financial systems do, and DeFi protects investors in ways that traditional finance cannot,” the group argued.
Related: SEC’s Crenshaw takes aim at crypto in final weeks at agency
In its letter, Citadel had argued that the SEC giving the green light to tokenized shares on DeFi “would create two separate regulatory regimes for the trading of the same security” and would undermine “the ‘technology-neutral’ approach taken by the Exchange Act.”
Citadel argued that exempting DeFi platforms from securities laws could harm investors, as the platforms wouldn’t have protections such as venue transparency, market surveillance and volatility controls, among others.
The letter initially drew considerable backlash, with Blockchain Association CEO Summer Mersinger saying Citadel’s stance was an “overbroad and unworkable approach.”
The letters come as the SEC looks for feedback on how it should approach regulating tokenized stocks, and agency chair Paul Atkins has said that the US financial system could embrace tokenization in a “couple of years.”
Tokenization has exploded in popularity this year, but NYDIG warned on Friday that assets moving onchain won’t immediately be of great benefit to the crypto market until regulations allow them to more deeply integrate with DeFi.
Magazine: SEC’s U-turn on crypto leaves key questions unanswered
-
Sports2 years agoStory injured on diving stop, exits Red Sox game
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports3 years agoButton battles heat exhaustion in NASCAR debut
-
Sports3 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment3 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment1 year agoHere are the best electric bikes you can buy at every price level in October 2024