Korean crypto rules: What you can and can't do in South Korea

When it comes to Korean crypto rules, the regulatory framework enforced by South Korea’s Financial Services Commission (KFTC) that controls how crypto is traded, taxed, and reported. Also known as KFTC crypto regulations, these rules make South Korea one of the most tightly controlled crypto markets in the world. Unlike countries that ban crypto outright, Korea allows trading—but only if you jump through a long list of hoops.

Every exchange operating in Korea must be registered with the KFTC and follow strict anti-money laundering (AML) rules. That means you can’t trade anonymously. You need real-name verification, bank account linking, and transaction records that can be pulled at any time. If you’re using a foreign exchange like Binance or Bybit, you’re technically breaking the law unless you use their Korea-specific platforms. Even then, you can’t deposit fiat directly—you have to use local bank transfers through approved partners. The KFTC, South Korea’s primary financial regulator responsible for overseeing crypto exchanges and enforcing compliance. Also known as Financial Services Commission, it doesn’t just monitor exchanges—it also cracks down on unlicensed token sales, fake airdrops, and pump-and-dump schemes. In 2023, they shut down over 200 illegal crypto platforms in a single year.

Crypto taxation in Korea is just as strict. The government treats crypto gains as taxable income, with rates as high as 42% for large traders. Every trade, swap, or even using crypto to buy a coffee counts as a taxable event. There’s no exemption for small trades—you can’t ignore gains under $100 like in some other countries. The tax office even requires exchanges to report user data annually, and if you’re caught underreporting, you could face fines or criminal charges. The crypto taxation Korea, the system that requires individuals and businesses to report all crypto transactions as income or capital gains under South Korean tax law. Also known as Korea crypto tax rules, it doesn’t care if you’re a day trader or just holding Bitcoin—you pay.

And it’s not just about trading. Mining is practically dead in Korea. High electricity costs and government pressure have forced most miners to shut down or move overseas. Even staking and DeFi activities are under scrutiny—there’s no official guidance yet, but the KFTC has warned that yield farming could be classified as a securities activity. If you’re thinking of launching a token in Korea, forget it. The KFTC has banned all initial coin offerings (ICOs) since 2017, and they’re still actively prosecuting anyone who tries to sneak one in.

So what’s left? You can still buy, sell, and hold crypto—but only through approved channels, only with your real identity, and only if you’re ready to pay taxes on every move. The rules are clear, the penalties are real, and the government isn’t backing down. What you’ll find below are real cases, broken down without fluff: how people navigate these rules, what exchanges still work, and why so many Korean traders end up using P2P platforms or offshore wallets—even if it’s risky. This isn’t theory. This is what’s happening right now, on the ground, under Korea’s strict watch.