South Korea is preparing to introduce the second phase of crypto regulation aimed at enhancing user protection. The new rules will address areas like stablecoins and crypto exchanges.
New Phase of Regulation
The first phase of crypto regulation, known as the Virtual Asset User Protection Act, was implemented in July 2024. It defines virtual assets, sets regulations for user protection, targets unfair trade practices, and outlines penalties. The second phase is expected to cover areas like stablecoins, crypto exchanges, and business entry regulations, although specific details have yet to be disclosed. South Korea plans to work with various government agencies to finalize the second phase of the law by mid-year.
Easing Corporate Trading Restrictions
Under current conditions, South Korean crypto laws only allow retail investors with verified real-name accounts to trade. Meanwhile, South Korea aims to ease restrictions on corporate crypto trading and gradually issue real-name accounts to institutional investors. This initiative will initially permit non-profit organizations to open real-name accounts on crypto exchanges.
Chairman's Commentary
In January last year, the Chairman of the South Korean Exchange, Jeong Eun-bo, stated that the trading platform aims to explore the approval of crypto spot ETFs this year. Reports indicate that the FSC also wishes to permit firms to initiate security token offerings. During the Securities and Derivatives Market Opening Ceremony, Jeong noted that the exchange would examine overseas cases for new businesses like cryptocurrency ETFs and explore new areas in capital markets.
South Korea is actively advancing its regulatory framework for cryptocurrencies to ensure user protection and adapt to changing global market conditions. The second phase of regulation could play a vital role in the development of the country's crypto industry.
