Korean regulator imposes $220k supervisory fee on domestic crypto exchanges

South Korea is set to impose a six-figure auditing fee on the country’s cryptocurrency exchanges based on their operating revenues.

Korean cryptocurrency exchanges such as Upbit, Bithumb and Coinone will have to pay an audit fee to the South Korean Financial Supervisory Service starting next year as the country strengthens its regulatory framework for the cryptocurrency sector.

According to local media reports, the audit fee is part of the “Virtual Asset User Protection Law” enacted by the South Korean Financial Services Commission on July 19. Under the legislation, the total fees collected on operating income for leading exchanges are estimated at around ₩300 million (about $220,000).

For these operators, the audit contribution is calculated based on the contribution rate applied to operating income from the previous fiscal year. Using the 2024 contribution rate for operating income, Upbit’s contribution will be approximately ₩272 million (approximately $199,400), while Coinone and Gopax are expected to contribute approximately ₩6.03 million ($4,400) and ₩830,000 (approximately $600), respectively.

Crypto exchange Korbit was exempted from the audit contribution due to its operating revenue of approximately ₩1.7 billion ($1.2 million) last year. The fee compensates for audits and services provided by the FSS and only applies to businesses with operating revenue of ₩3 billion won or more.

New rules for Korean crypto exchanges

Local industry representatives initially proposed postponing the implementation of audit fees on crypto operators. However, the decision to implement these fees was accelerated due to upcoming audits by the FSS following the enactment of the Virtual Asset User Protection Act.

The new law imposes several requirements on crypto exchanges, including requiring users to keep at least 80% of their assets in cold storage. These assets must be kept separate from company funds and invested in “risk-free” assets to generate returns. Exchanges must also re-evaluate listed assets by verifying their circulation and reviewing their technical documentation, and any assets that do not meet the required criteria must be delisted.

The new practice, which came after the South Korean Ministry of Economy and Finance postponed the 20% tax on cryptocurrency earnings, was reflected in news that the ruling party could postpone the tax until 2028.