South Korea | Crypto

South Korea’s government and ruling party reportedly agreed on a proposal to cap major shareholder stakes in crypto exchanges at 20%, with limited exemptions for new operators. South Korea’s government and ruling party have reportedly agreed on a plan to cap the ownership stakes of major shareholders in domestic crypto exchanges at 20%. The Democratic Party of Korea’s digital asset task force and the Financial Services Commission (FSC) agreed to set the maximum shareholding limit at 20% after discussions, according to a Wednesday report by local media outlet Herald Economy. However, regulators may allow exceptions of up to 34% for new businesses through an enforcement decree. The threshold references the Commercial Act’s 33.3% veto threshold in general shareholders’ meetings, per the report. Read more

Deputy Prime Minister Koo Yun-cheol ordered an inter-agency review of seized crypto wallets after the National Tax Service exposed a seed phrase in a press release. South Korea’s Deputy Prime Minister and Minister of Economy and Finance, Koo Yun-cheol, announced a cross-agency sweep of how the government and public institutions handle seized digital assets after the National Tax Service (NTS) accidentally leaked a wallet seed phrase in a press release photo on Thursday.  Officials published an image of a hardware wallet showing the full recovery phrase. Authorities lost roughly 4 million Pre-Retogeum (PRTG) tokens worth about 6 billion won ($4.8 million) from a confiscated wallet as a result. In a post on X, Yun-cheol said that the government, alongside the Financial Services Commission and Financial Supervisory Service, would review the status and management of all digital assets seized from delinquent taxpayers and “promptly” strengthen security controls. Read more

South Korea’s National Tax Service reportedly published a wallet seed phrase in a press release, and tokens worth $4.8 million were swiftly drained in the latest custody blunder for the authorities. South Korea’s National Tax Service (NTS) accidentally exposed a crypto wallet seed phrase in an official press release on Thursday, leading to a loss of 4 million PRTG  (Pre‑Retogeum) tokens worth about $4.8 million from the address, according to local media reports. According to multiple Korean media reports on local sites Naver, Chosun and others, the press release related to the National Tax Service’s enforcement campaign against tax delinquents and seizures that the authorities had carried out. The release reportedly included an image of a Ledger cold wallet and a sheet of paper showing the wallet’s full mnemonic phrase without any blur or masking. Blockchain researchers later identified an Ether (ETH) address linked to the leaked phrase that briefly held the 4 million PRTG tokens before the entire balance was...

A proposed law would require online investment influencers to reveal their holdings and paid promotions, with penalties potentially comparable to market manipulation violations. South Korea is reportedly preparing new rules that would force social-media personalities promoting cryptocurrencies and stocks to reveal what they own and whether they are being paid. Democratic Party lawmaker Kim Seung-won, a member of the National Assembly’s Political Affairs Committee, is drafting amendments to the Capital Market and Financial Investment Business Act and the Act on the Protection of Virtual Asset Users, according to a report from Korean-language business news website Herald Business. Under the proposal, individuals who repeatedly offer advice or receive compensation to encourage the public to buy or sell financial products or virtual assets must disclose the compensation received and the type and quantity of assets they hold. The requirement would apply to advice delivered through publications, online communicatio...

South Korea reopens crypto to corporations with strict caps and asset limits. This is part of a broader strategy that includes stablecoin legislation and potential spot crypto ETFs. South Korea is ending a nine-year ban on corporate crypto trading, allowing listed entities and professional investment companies to reenter the market under a regulated framework. Corporate participation will be tightly controlled, with investments capped at 5% of annual equity capital and limited to the top 20 cryptocurrencies traded on regulated domestic exchanges. Institutional entry may gradually improve liquidity and market structure, but strict limits mean large capital inflows from corporate treasuries are unlikely in the short term. Read more

A mistaken Bitcoin payout revealed how exchange ledgers work and why South Korea is rethinking internal controls for crypto platforms. A simple data-entry error allowed 620,000 nonexistent BTC to appear in user accounts for 20 minutes because trades update a private database first, with onchain settlement happening later. Around 1,788 BTC worth of trades were executed before the exchange locked everything down. What could have been dismissed as a harmless error turned into a serious operational and regulatory event. Regulatory filings showed Bithumb held only 175 BTC of its own in Q3 2025, while it held custody of over 42,000 BTC for customers. This highlights how heavily the system depends on accurate internal accounting. Read more

South Korean authorities launched an investigation into Bithumb after it mistakenly credited 620,000 BTC to users, adding to concerns about “paper Bitcoin” and internal controls. South Korea’s financial watchdog opened an investigation into Bithumb after the exchange mistakenly credited hundreds of thousands of Bitcoin that it did not actually hold to user accounts. The Financial Supervisory Service (FSS) launched a probe into Bithumb for alleged platform violations around the erroneous crediting of billions of dollars in non-existent Bitcoin (BTC) to user accounts, Yonhap News reported Tuesday. Bithumb acknowledged the incident on Saturday, saying the platform “incorrectly paid” 620,000 BTC ($42.8 billion) to users during a promotional event. Read more

South Korea’s financial watchdog detailed planned investigations into high-risk trading tactics as it prepares the next phase of crypto regulation, Yonhap News Agency reported. South Korea’s Financial Supervisory Service (FSS) said it will step up scrutiny of suspected cryptocurrency price manipulation in 2026, outlining a slate of planned investigations that target high-risk trading tactics, including “whale” activity and schemes that exploit disruptions at local exchanges, local outlet Yonhap reported Monday. According to Yonhap News Agency, FSS Governor Lee Chang-jin said that the agency will target high-risk trading practices that undermine market order, including coordinated manipulation and schemes exploiting disruptions in exchange infrastructure.  The FSS said the probes will focus on tactics that involve large-scale trading by whales, artificial price swings during exchange deposit or withdrawal suspensions and coordinated trading mechanisms using APIs or social media to spread false information.  Re...

Recent volatility reviews, new surveillance systems and a landmark court ruling show how South Korea is enforcing stricter oversight of crypto markets. South Korean regulators are stepping up oversight of the domestic cryptocurrency market, signaling a faster, more coordinated approach to detecting suspicious trading activity amid renewed volatility.  The heightened scrutiny was highlighted after South Korea's Financial Supervisory Service (FSS) said it was reviewing sharp price movements in the ZKsync token listed on Upbit, following extreme volatility concentrated around a system maintenance window, according to The Korea Economic Daily (Hankyung). The FSS said it was analyzing data and could escalate the review into a formal investigation, depending on the findings.  Read more

Crypto trading may be huge in South Korea, but just over the border, crypto hacking accounts for around 13.5% of North Korea’s GDP.

Crypto trading may be huge in South Korea, but just over the border, crypto hacking accounts for around 13.5% of North Korea’s GDP.

Crypto trading may be huge in South Korea, but just over the border, crypto hacking accounts for around 13.5% of North Korea’s GDP.

Regulators gain wider discretion to vet shareholders, finances and controls as South Korea tightens crypto market access. South Korea’s National Assembly has approved an overhaul of the country’s crypto licensing regime, tightening entry requirements for virtual asset service providers (VASPs) and expanding scrutiny to include controlling shareholders. On Thursday, lawmakers passed an amendment to the Act on Reporting and Using Specified Financial Transaction Information, a cornerstone of Korea’s Anti-Money Laundering (AML) framework for digital assets. The committee substitute bill was approved at a plenary session and is expected to take effect six months after the law is enacted. The new rules widen background checks for crypto firms applying to operate in South Korea. Regulators will now vet not just company executives but also major shareholders. The list of red flags has expanded beyond financial crimes to include offenses such as drug trafficking, tax evasion, fair-trade violations, serious economic cr...

South Korea's Democratic Party advances legislation requiring stablecoin issuers to maintain 5 billion won ($3.5 million) in capital and establishing an inter-ministerial Virtual Asset Committee, though Bank of Korea Governor Lee Chang-yong warns dollar-pegged tokens could weaken capital controls during market stress. The post South Korea’s New Crypto Bill Sets $3.5M Minimum for Stablecoin Issuers – Can It Pass? appeared first on Cryptonews.

The Financial Services Commission chief says ownership limits are still under negotiation as lawmakers debate the Digital Asset Basic Act ahead of a mid-February deadline. South Korea’s top financial regulator said crypto exchanges should face ownership limits similar to those applied to securities markets, signaling a harder public stance on governance reforms under the country’s proposed Digital Asset Basic Act. According to a report by The Korea Times, the Financial Services Commission (FSC) Chair Lee Eog-weon said licensed crypto exchanges should no longer be treated as ordinary private companies but as entities with public-infrastructure characteristics.  Lee’s comments come as the FSC reviews a proposal to cap major shareholders’ stakes in crypto exchanges at around 15% to 20%, a measure that has drawn resistance from exchange operators and raised concerns within the ruling Democratic Party. Read more

South Korean crypto exchange Coinone has reportedly begun selling major shareholder stakes, with Coinbase rumored to be eyeing a strategic entry. Coinone, one of a handful of regulated South Korean cryptocurrency exchanges, is reportedly up for sale, with both local financial institutions and foreign exchanges among the rumored bidders. The company has begun a process to sell the stake held by chairman Cha Myung-hoon, who controls 53.4% of the company, local news agency Seoul Economic Daily reported on Sunday. “We are discussing partnerships, including equity investments, with overseas exchanges and domestic financial institutions,” Coinone confirmed to the outlet, adding that no final decision has been made. Read more

South Korea’s Gwangju prosecutors are probing missing seized Bitcoin after an audit, with phishing suspected after a wallet password was exposed. Local reports say funds were tied to illegal gambling and stored on a USB, prompting scrutiny of state custody, as regulators have expanded seizure rules. The post South Korea’s Seized Bitcoin Vanishes in Major Phishing Heist – Prosecutors Probe $300M Loss appeared first on Cryptonews.

South Korea is reportedly reviewing exclusive bank partnerships for crypto exchanges as regulators assess competition and prepare the Digital Asset Basic Act. South Korea’s financial regulators are reviewing a long-standing practice that effectively ties each cryptocurrency exchange to a single banking partner, as part of a broader examination of competition in the country’s crypto market, according to local media. Business media outlet the Herald Economy, citing government officials familiar with inter-agency discussions, said a review effort is being coordinated between the Financial Services Commission (FSC) and the Fair Trade Commission as policymakers evaluate whether existing practices contribute to market concentration.  Although the “one exchange–one bank” model is not explicitly codified in South Korean laws, it emerged in practice due to Anti-Money Laundering (AML) and customer due diligence requirements.  Read more

South Korea’s customs agency charged three suspects over a more than $100 million crypto-linked remittance scheme using WeChat Pay and Alipay, per Yonhap. South Korean authorities have uncovered an underground remittance operation that moved roughly 150 billion won (about $100 million to $110 million) through digital assets, according to local media reports. The Korea Customs Service has referred three suspects for prosecution, including a Chinese man in his 30s, on charges of violating the Foreign Exchange Transaction Act, Yonhap News reported Monday. Over the past four years, the illicit operation has allegedly laundered more than $100 million collected through WeChat Pay and Alipay, which was converted into cryptocurrencies through overseas exchanges and transferred into South Korean wallets before being converted back to fiat currency. Read more

Google will require proof of FIU registration acceptance for crypto apps, raising compliance hurdles for offshore exchanges serving South Korean users. Google is rolling out updated crypto app requirements in South Korea, a move that may significantly restrict access to offshore crypto exchanges by tying app availability to local regulatory clearance.  According to South Korean media outlet News1, starting Jan. 28, crypto exchange and wallet apps listed on Google Play in South Korea must upload documentation proving that their Virtual Asset Service Provider (VASP) registration with the country's Financial Intelligence Unit (FIU) has been accepted.  Google reportedly clarified that developers listing crypto exchange and custodial wallet apps must upload proof of completed FIU registration acceptance through its developer console.  Read more