South Korea halts ‘all work’ on crypto regulations amidst martial law aftermath

South Korea’s National Assembly has reportedly decided to suspend all discussions regarding crypto-related regulations following plans to impose martial law and impeach the current president.

According to Chosun’s report, an official from South Korea’s National Assembly spoke about the fate of the country’s crypto regulations, which are still being worked on. The report noted that all crypto-related policies “are buried under the impeachment issue, making it impossible to expect a vote.”

The unnamed official stated that the public should expect an “indefinite postponement” for bills related to virtual assets, at least “until the impeachment process is over.” The report predicted that discussions regarding all crypto-related regulations will continue in the first half of 2025.

“It is difficult to say since martial law has received the full attention of the Parliament, but although there are many bills regarding virtual assets, we must address this first,” the official said.

The bills in question include South Korea’s initial coin offering ban, real-name accounting for crypto trading, a decision to allow local companies to add cryptocurrencies to their balance sheets, Bitcoin (BTC) spot ETF approval, and security token offering.

One of the bills that barely survived after martial law is the proposal to postpone the crypto tax law until 2027. The bill was debated on December 4 and received a majority vote in the National Assembly on December 10, the last day of regular sessions. before the council went into “full impeachment mode.”

If the National Assembly had not passed the bill by December 10, the crypto tax law would have gone into effect on January 1, 2025.

South Korea’s Financial Services Commission also takes a similar approach. The FSC has recently finalized the required guidelines for institutional accounts, based on the recommendation of the Virtual Asset Committee, and they are planned to be implemented later this month.

However, after the chaos fueled by martial law, financial authorities decided not to focus on virtual assets and prioritize traditional financial markets such as stocks, bonds, short-term funds and exchange funds.

The crypto industry in South Korea has long been pushing for more regulations allowing crypto trading for individuals and companies, criticizing the country’s lack of clear guidelines and protections.

With crypto laws being set aside indefinitely by the government, South Korea risks falling behind other countries such as the United States and Hong Kong, which are stepping up their crypto regulatory frameworks. As a result, the report pointed to a growing concern that martial law could push domestic crypto firms and investors to move abroad.