South Korea Considers Opening Crypto Exchanges to Foreign Investors

South Korea may open its cryptocurrency market to foreign traders while tightening controls on money laundering. This was stated by Kim Seong-jin, head of the virtual assets department at the Financial Services Commission (FSC), according to local media.

According to him, the regulator is exploring the possibility of easing restrictions on foreign market participants’ access to South Korean crypto exchanges. For this to happen, platforms must comply with international anti-money laundering (AML) standards. Specific timelines for the reforms have not yet been announced.

Currently, foreign investors are unable to trade on local exchanges due to rules requiring user verification through bank accounts in the name of South Korean residents.

Peter Chung, head of research at Presto Research, told The Block that opening the market would not only attract foreign capital but also address the issue of price discrepancies in cryptocurrencies, known as the “kimchi premium.”

He noted that the initiative would also spur further growth in the US dollar-based stablecoin market.

Since 2022, the country has implemented the Travel Rule, requiring exchanges to collect and store data on transactions amounting to 1 million won (~$685.95). However, regulators still doubt the readiness of trading platforms to fully comply with AML requirements, Chung noted.

Back in December 2024, the South Korean government postponed the introduction of new taxes on cryptocurrencies until 2027. Authorities have been working on the relevant amendment since 2020.