South Korean crypto emerges from failed coup into crackdown season

Published

3 months ago

April 18, 2025

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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.

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.

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.

Bitcoin Regulation, South Korea, Cryptocurrency Exchange — *Park flashes supercars on social media. Source:* *Jon Bur Kim*

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

Politics

Coinbase crypto lobby urges Congress to back major crypto bill

Published

4 hours ago

July 8, 2025

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Coinbase crypto lobby urges Congress to back major crypto bill

US House lawmakers have been urged by 65 crypto organizations to pass the CLARITY Act, which would hand most policing of crypto to the CFTC.

Politics

Reform UK poses ‘very serious threat’ to Labour, Welsh first minister warns

Published

4 hours ago

July 8, 2025

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Reform UK poses 'very serious threat' to Labour, Welsh first minister warns

The threat from Reform in Wales is “very serious”, the country’s Labour leader said as exclusive polling revealed Nigel Farage’s party is the first choice for Welsh voters.

Speaking to Beth Rigby on the Electoral Dysfunction podcast, Welsh First Minister Eluned Morgan said: “We think the threat from Reform is a very serious threat.

“I think it is important people recognise that things that we see every day in our lives in Wales may be snatched away from us, and the kind of stability that we’ve had for a long time.”

👉 Click here to listen to Electoral Dysfunction on your podcast app 👈

Ms Morgan admitted “we’ve got a lot of work to do to get voters back” ahead of the May 2026 Senedd (Welsh parliament) elections – something backed up by exclusive polling that reveals Reform is beating Welsh Labour, who have been in power in the Senedd since 1999.

A More in Common poll for Sky News found 28% of people in Wales would vote for Reform if an election for the Senedd was called tomorrow.

That was followed closely by nationalist party Plaid Cymru on 26%, Labour with 23%, the Conservatives on 10%, Lib Dems with 7%, the Green Party with 4% and 2% for other parties or independent candidates.

Of those who voted for Labour at last year’s general election, less than half (48%) would vote for them again, while 15% would go to Plaid Cymru and 11% to Reform – although 13% were undecided.

A total of 883 people representative of the Welsh population were asked from 18 June to 3 July.

Last month, Mr Farage told an event in the steel town of Port Talbot, he would reopen Welsh coal mines to provide fuel for blast furnaces.

Ms Morgan said she will not be “chasing Reform down a path… because those aren’t my values”.

“What we’ll be doing is offering a very clear alternative, which is about bringing communities together,” she said.

“I think it’s really important that we’re authentic and we’re clear with people about what we stand for.

“I think we’ve got to lead with our values so we’re about bringing communities together not dividing them and I do think that’s what reform is interested in is dividing people and people do need to make choices on things like that.”

She admitted “there is a possibility” Reform could be the largest party in the Senedd “and that is really concerning”.

However, she said the way voting in Wales works means it would be “difficult for them to rule by themselves”.

Would she go into coalition with Reform?

“I wouldn’t touch Reform with a barge pole,” she said.

Politics

‘A threat to national security’: Fears drones could be used to lift inmates out of prisons

Published

5 hours ago

July 8, 2025

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Drones are sending 'overwhelming amounts' of drugs into prisons - and could help inmates escape, report warns

Sophisticated drones sending “overwhelming amounts” of drugs and weapons into prisons represent a threat to national security, according to an annual inspection report by the prisons watchdog.

HMP chief inspector of prisons Charlie Taylor has warned criminal gangs are targeting jails and making huge profits selling contraband to a “vulnerable and bored” prison population.

The watchdog boss reiterated his concerns about drones making regular deliveries to two Category A jails, HMP Long Lartin and HMP Manchester, which hold “the most dangerous men in the country”, including terrorists.

Mr Taylor said “the police and prison service have in effect ceded the airspace” above these two high-security prisons, which he said was compromising the “safety of staff, prisoners, and ultimately that of the public”.

“The possibility now whereby we’re seeing packages of up to 10kg brought in by serious organised crime means that in some prisons there is now a menu of drugs available,” he said. “Anything from steroids to cannabis, to things like spice and cocaine.”

“Drone technology is moving fast… there is a level of risk that’s posed by drones that I think is different from what we’ve seen in the past,” warned the chief inspector – who also said there’s a “theoretical risk” that a prisoner could escape by being carried out of a jail by a drone.

He urged the prison service to “get a grip” of the issue, stating: “We’d like to see the government, security services, coming together, using technology, using intelligence, so that this risk doesn’t materialise.”

The report makes clear that physical security – such as netting, windows and CCTV – is “inadequate” in some jails, including Manchester, with “inexperienced staff” being “manipulated”.

Mr Taylor said there are “basic” measures which could help prevent the use of drones, such as mowing the lawn, “so we don’t get packages disguised as things like astro turf”.

Responding to the report, the Prison Advice and Care Trust (PACT) said: “The ready access to drugs is deeply worrying and is undermining efforts to create places of rehabilitation.”

Mr Taylor’s report found that overcrowding continues to be what he described as a “major issue”, with increasing levels of violence against staff and between prisoners, combined with a lack of purposeful activity.

Some 20% of adult men responding to prisoner surveys said they felt unsafe at the time of the inspection, increasing to 30% in the high security estate.

Andrea Coomber, chief executive of the Howard League for Penal Reform, said: “This report is a checklist for all the reasons the government must prioritise reducing prison numbers, urgently.

“Sentencing reform is essential, and sensible steps to reduce the prison population would save lives.”

The report comes after the government pledged to accept most of the recommendations proposed in the independent review of sentencing policy, with the aim of freeing up around 9,500 spaces.

Those measures won’t come into effect until spring 2026.

Prisons Minister Lord Timpson said Mr Taylor’s findings show “the scale of the crisis” the government “inherited”, with “prisons dangerously full, rife with drugs and violence”.

He said: “After just 500 prison places added in 14 years, we’re building 14,000 extra – with 2,400 already delivered – and reforming sentencing to ensure we never run out of space again.

“We’re also investing £40m to bolster security, alongside stepping up cooperation with police to combat drones and stop the contraband which fuels violence behind bars.”