South Korea
South Korea has one of the world's most active crypto retail markets and now one of its more assertive supervisors. VAUPA Phase 1 criminalised market abuse and locked down custody standards; Phase 2 — currently in draft — will decide whether KRW stablecoins can operate onshore and how token issuers are regulated.
Developing
Financial Services Commission (FSC) · Financial Supervisory Service · FIU
Specified Financial Information Act (VASP registration); Virtual Asset User Protection Act (Phase 1 live July 2024); Phase 2 (issuer conduct, stablecoins) in draft.
SFIA + FIU rules; real-name bank account mandate for exchange fiat on/off-ramp; Travel Rule via CODE alliance since March 2022.
Implemented — KRW 1m threshold; single-counterparty messaging via CODE / VerifyVASP.
20% tax on gains above KRW 2.5m postponed to Jan 2027; corporate rates apply currently.
VAUPA — user asset segregation, cold-wallet ratio ≥80%, insurance/reserve requirement, unfair-trading criminal penalties.
Phase 1 conduct rules for exchanges; market abuse criminalised.
Original VASP registration and AML framework.
KRW-referenced stablecoins would require FSC authorisation; disclosure standards for token issuers.
AML/KYC failures over 2022-2024 period; largest domestic crypto penalty.