South Korea to complete virtual asset law by 2025

The Financial Services Commission confirmed that the second phase of legislation will be completed before the September 2025 National Assembly session. The new rules will cover stablecoins, spot ETFs, and tax incentives for crypto companies.

Cryptocurrency trading platforms will be reclassified as “venture companies” under the legislation. The classification will provide tax breaks, subsidies, and financing opportunities for these businesses.

The legislation is part of President Lee Jae-myung’s five-year economic reform plan. The plan includes digital assets as a priority area for government policy.

The government plans to launch a won-backed stablecoin framework by October 2025. Regulators are also preparing to introduce spot cryptocurrency ETFs with market rollout expected later in 2025.

More than 10.86 million people in South Korea now trade cryptocurrency. This represents about 20 percent of the country’s total population.

Young investors in their 20s hold the highest average account balances despite being the smallest age group of traders. Data from August shows over 10,000 Koreans hold crypto portfolios worth more than $750,000.

Upbit exchange manages the majority of high-value crypto accounts in South Korea. The platform handles trading for most large portfolio holders in the country.

The FSC vice chair said the reforms are designed to “expand institutional access while protecting retail investors through a clear and compliant framework.”

The FSC has suspended crypto lending services after forced liquidations increased. The commission also deployed AI technology to detect hidden digital assets held by tax evaders.

The government has tightened oversight of lending practices and tax compliance in the crypto sector. These measures address risk management concerns while supporting market development.

South Korea’s virtual asset law will establish standards for institutional and retail participation in digital assets.