Source: Cointelegraph.com NewsSouth Korea kicked off 2025 with political chaos, regulatory heat and a crypto market finally brought to heel \u2014 or at least forced to grow up.
\nThe nation closed 2024 in disarray following then-President Yoon Suk Yeol\u2019s botched martial law stunt in December.
\nIn 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.
\nHere\u2019s a breakdown of the key developments that shaped South Korea\u2019s crypto sector in Q1 of 2025.
\nSouth Korea\u2019s economy limped into 2025 as local currency tanked. Source: Ki Young JuSouth Korean crypto traders given yet another two-year tax exemption<\/p>\n
Jan. 1 \u2014 Crypto tax postponed
\nA 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.
\nRelated: Crypto\u2019s debanking problem persists despite new regulations\u00a0
\nThe 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\u2019s failed martial law stunt and subsequent impeachment.<\/p>\n
Jan. 14 \u2014 Warning against North Korean crypto hackers
\nThe 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\u2019s WazirX and the $50-million hack against Upbit, South Korea\u2019s largest crypto exchange.<\/p>\n
At least $1.34 billion of crypto stolen in 2024 has been attributed to North Korea. Source: Chainalysis
\nJan. 15 \u2014 Companies wait on the sidelines for crypto greenlight
\nSouth Korea\u2019s 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.
\nInstead, the FSC announced investor protections against price manipulation and stricter stablecoin oversight.
\nJan. 16 \u2014 First enforcement of crypto market manipulation
\nSouth 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.
\nMeanwhile, 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.
\nJan. 23 \u2014 Upbit, Bithumb compensate users after service outages during martial law
\nUpbit 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.<\/p>\n
Ex-President Yoon took his shot at martial law, which backfired and shaped South Korea\u2019s 2025. Source: Kang Min Seok, Presidential Security Service\u00a0
\nSouth Korean crypto world finally opened to corporations
\nFeb. 13 \u2014 Charities and universities get first dibs on corporate crypto access
\nThe 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 \u201creal-name\u201d 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.
\nSouth Korea\u2019s 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.
\nRelated: Market maker deals are quietly killing crypto projects
\nCrypto 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.
\nSince 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.
\nFeb. 21 \u2014 Alleged serial fraudster busted again
\nPolice rearrested \u201cJon Bur Kim,\u201d 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.
\nThis wasn\u2019t Park\u2019s 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.
\nPark flashes supercars on social media. Source: Jon Bur KimFeb. 25 \u2014 Upbit operator Dunamu gets slapped
\nThe nation\u2019s 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\u2019 deposits and withdrawals for three months.
\nFeb. 27 \u2014 Crypto crime force formalized
\nSouth 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.
\nFeb. 28 \u2014 Upbit operator Dunamu files lawsuit to overturn business sanctions
\nDunamu said it filed a lawsuit against the FIU to challenge the sanctions imposed on the exchange.<\/p>\n
Bitcoin ETF next on checklist for South Korean crypto space
\nMarch 5 \u2014 Reconsidering Bitcoin ETF ban
\nThe FSC started reviewing legal pathways to allow Bitcoin (BTC) spot exchange-traded funds (ETFs), citing Japan\u2019s evolving regulatory approach as a potential model. This marks a notable shift from South Korea\u2019s previous opposition to crypto-based ETFs.
\nThe 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.
\nWhile the review remains in its early stages, regulators are no longer dismissing the possibility outright.
\nMarch 21 \u2014 Crackdown on unregistered exchanges begins
\nThe 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.<\/p>\n
March 26 \u2014 17 exchange apps blocked (including KuCoin and MEXC) Source: Cointelegraph.com NewsSouth Korea kicked off 2025 with political chaos, regulatory heat and a crypto market finally brought to heel \u2014 or at least forced to grow up. The nation… <\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5],"tags":[],"_links":{"self":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts\/127486"}],"collection":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=127486"}],"version-history":[{"count":0,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts\/127486\/revisions"}],"wp:attachment":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=127486"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=127486"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=127486"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nGoogle 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.
\nThere are 22 unregistered overseas exchanges on the regulators\u2019 radar, and 17 have been banned from the Google Play store. Source: FSCMarch 27 \u2014 Upbit scores three-month break
\nA South Korean court temporarily lifted the Feb. 25 partial business suspension imposed on crypto exchange Upbit by the FIU. The court\u2019s decision allows Upbit to resume serving new users while the case is under review.
\nSouth Korean crypto expected to go from crackdown in Q1 to campaign trail in Q2
\nAs March ended, more than 16 million investors \u2014 roughly a third of South Korea\u2019s population \u2014 held crypto accounts, surpassing the 14.1 million domestic stock traders. But that surge in adoption came as trading activity cooled. Upbit, the country\u2019s dominant exchange, saw volumes fall by 34%, dropping from $561.9 billion in Q4 2024 to $371 billion in Q1 2025, according to CoinGecko.
\nBy mid-April, the crackdown was still gaining steam. Apple followed Google\u2019s lead in removing offshore exchange apps from its store, while prosecutors filed yet another round of market manipulation charges.
\nSouth Korea\u2019s crypto industry is now contending with tighter rules, rising institutional expectations and a government no longer content to watch from the sidelines.
\nAll this unfolds ahead of an early presidential election in June, following Yoon\u2019s impeachment. Crypto played a visible role in Yoon\u2019s successful 2022 presidential election campaign and is expected to remain a key issue with voters.\u00a0
\nOne 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\u2019s understanding of the technology came into question as he admitted to not knowing what a central bank digital currency is.
\nMagazine: Uni students crypto \u2018grooming\u2019 scandal, 67K scammed by fake women: Asia ExpressRead More<\/a><\/p>","protected":false},"excerpt":{"rendered":"