South Korean crypto emerges from failed coup into crackdown season
South Korea's crypto sector faced significant changes in Q1 2025 amid political turmoil and regulatory developments. A planned 20% capital gains tax on crypto was postponed until 2027, marking the third delay due to economic concerns and fears of investor flight. A joint statement from the US, Japan, and South Korea warned crypto firms about North Korean hacking threats. The Financial Services Commission (FSC) proposed allowing corporate entities to open crypto trading accounts by late 2025, requiring compliance with KYC and AML regulations. Upbit faced regulatory scrutiny for KYC violations, leading to a partial business suspension. The FSC began reviewing legal pathways for Bitcoin spot ETFs, influenced by international trends. Google Play and Apple removed unlicensed crypto exchange apps at regulators' requests. By March, over 16 million South Koreans held crypto accounts, although trading volumes declined significantly. The upcoming presidential election is expected to keep crypto regulation a key issue, with candidates pledging reforms.
