South Korea kicks off talks on the second phase of crypto regulations, focusing on stablecoins and user protection, with a draft expected by mid-2025.
South Korea‘s financial regulator, the Financial Services Commission, has officially started working on the second phase of its crypto rules to boost user protection, local news outlet EDaily reports.
Kim So-young, Vice Chairman of the FSC, said the move to push ahead with phase two comes as the global crypto market faces “rapid changes with mixed feelings of optimism and uncertainty.” South Korea’s first crypto regulation, known as the Virtual Asset User Protection Act, came into effect in July 2024. It defines “virtual assets,” sets rules for user protection, targets unfair trade practices, and outlines penalties.
The new set of rules will reportedly cover such areas as stablecoins, crypto exchanges, and business entry regulations, though detail are yet to be revealed. The FSC reportedly plans to work with other government agencies to wrap up the second phase of the law by mid-2025, although no exact dates have been set.
South Korea easing crypto restrictions
Meanwhile, South Korea is considering easing restrictions on corporate crypto trading and plans to gradually issue real-name accounts to institutional investors. The update will allow companies, starting with non-profit organizations, to open real-name accounts on crypto exchanges.
Currently, South Korea’s crypto laws only permit retail investors with verified real-name accounts to trade. While there is no official ban on institutional investors, banks have been advised not to issue real-name accounts to corporations.
In January 2024, Chairman of the South Korea Exchange, Jeong Eun-bo, said the trading platform wants to “explore” crypto spot ETF approval in 2025 as reports indicate that the FSC also wants to allow companies to launch security token offerings. In his speech at the the Securities and Derivatives Market Opening Ceremony 2025, Jeong said the exchange will “benchmark overseas cases for new businesses such as cryptocurrency ETFs and explore new areas in the capital market.”
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