Regulators' Caution Dampens Expectations for South Korean Crypto Policy Changes

South Korean regulators have expressed caution on easing virtual-asset regulations in response to industry demands. The Financial Services Commission, Ministry of Economy and Finance, and Bank of Korea view deregulation requests as difficult to pursue immediately.

The industry has proposed loosening entry rules for overseas virtual-asset transfer businesses, easing registration requirements for crypto-based remittance and foreign-exchange operators, improving regulations on overseas remittances and investment, and early passage of the Digital Asset Basic Act.

However, the Financial Services Commission stated that nothing has been decided and authorities are still gathering industry feedback. The finance ministry and Bank of Korea also clarified that expanding eligibility to non-VASP operators for overseas virtual-asset transfer services is not under review.

Industry participants emphasize regulatory changes are needed due to the growth of the global digital-asset market, shifting attention towards future discussions on the Digital Asset Basic Act and the policy direction of Han Sung-sook, the nominee for prime minister.