South Korea Considers Restricting Access to Decentralized Finance Services

South Korean regulators are considering imposing access restrictions on decentralized finance (DeFi) services. The move follows a government-commissioned study by the Korea Institute of Finance (KIF), which recommended regulatory intervention in the DeFi sector.

The KIF report argued that decentralized operators should be treated as 'unlicensed virtual asset service providers' due to the challenges in establishing clear regulatory jurisdiction.

To address these difficulties, the institute proposed that authorities 'actively utilize measures such as restricting access for domestic users and limiting transactions.'

South Korea's Financial Services Commission (FSC) commissioned the study specifically to inform the drafting of a foundational digital asset law. The KIF study is widely expected to be reflected in the government's future bill, potentially leading to significant restrictions on how domestic users can access and interact with DeFi platforms.