South Korea to draft next crypto regulation bill by year-end: report

South Korea is beginning talks on the second phase of crypto regulations focusing on stablecoins and user protection, with a draft expected in mid-2025.

South Korea’s financial regulator, the Financial Services Commission, has officially started working on the second phase of crypto rules to increase user protection, local news outlet EDaily reports.

FSC Vice President Kim So-young said the move to move into the second phase comes at a time when the global crypto market is facing “rapid changes with mixed emotions of optimism and uncertainty.” South Korea’s first crypto regulation, known as the Virtual Asset User Protection Act, went into effect in July 2024. It “defines virtual assets,” sets rules for user protection, targets unfair business practices, and outlines penalties.

The new rules will reportedly cover areas such as stablecoins, crypto exchanges and business entry regulations, but details have not yet been announced. Although no exact date has been set, the FSC reportedly plans to work with other government agencies to complete the second phase of the law by mid-2025.

South Korea eases crypto restrictions

Meanwhile, South Korea is considering easing restrictions on institutional crypto trading and plans to gradually provide real-name accounts to institutional investors. The update will allow companies, especially non-profit organizations, to open real-name accounts on crypto exchanges.

Currently, South Korea’s crypto laws only allow retail investors with verified real-name accounts to trade. While there is no formal ban on institutional investors, banks have been advised not to give accounts to companies in real names.

In January 2024, South Korean Stock Exchange President Jeong Eun-bo said that the trading platform wanted to “explore” crypto spot ETF approval in 2025, as reports indicate that the FSC also wants to allow companies to launch security token offerings. In his speech at the Securities and Derivatives Market Opening Ceremony 2025, Jeong said that the exchange will “benchmark overseas cases for new businesses such as cryptocurrency ETFs and explore new areas in the capital market.”