South Korea crypto regulation: What you need to know about rules, taxes, and exchanges

When it comes to South Korea crypto regulation, a tightly controlled framework that treats cryptocurrency as a financial asset subject to strict oversight. Also known as Korean crypto compliance rules, it’s one of the most detailed and enforced systems in Asia, blending tax law, anti-money laundering rules, and exchange licensing into a single, complex system. Unlike countries that take a hands-off approach, South Korea demands full transparency—every trade, wallet transfer, and exchange account must be tied to your real identity.

This isn’t just about KYC crypto South Korea, the mandatory identity verification process required by all licensed exchanges. Also known as crypto identity verification in Korea, it’s not optional—you can’t even open a trading account without linking your national ID and bank account. The government tracks every transaction above 1 million KRW, and exchanges report directly to the Financial Services Commission. If you’re using a foreign exchange without KYC, you’re not just risking your funds—you’re breaking the law. Then there’s crypto taxes South Korea, a flat 20% tax on crypto profits over 2.5 million KRW per year. Also known as Korean crypto capital gains tax, it applies whether you sell Bitcoin for won, trade one altcoin for another, or even receive crypto as payment. There’s no exemption for long-term holds, and the tax office uses blockchain analytics to catch unreported gains. The rules also ban anonymous trading, restrict leverage to 10x, and require all exchanges operating in Korea to be licensed and audited annually. Even decentralized exchanges aren’t safe—any platform accessible to Korean users must comply or risk being blocked.

These rules didn’t come out of nowhere. They’re a direct response to the 2018 coin fraud scandals, the rise of unregulated trading bots, and the fear of money laundering through crypto. Today, Korean traders face higher compliance costs than almost anywhere else—some startups spend over 30% of their budget just on legal and reporting systems. But for users, it means less scam tokens, fewer pump-and-dumps, and more trust in the platforms that survive the filter. What you’ll find below are real reviews and breakdowns of exchanges that still work under these rules, crypto projects that got shut down for non-compliance, and guides on how to legally report your gains without getting fined.