South Korea Cryptocurrency Restrictions: What’s Banned, What’s Allowed, and How Traders Adapt

When it comes to South Korea cryptocurrency restrictions, a tight regulatory framework imposed by the Financial Services Commission (FSC) and the Korea Financial Intelligence Unit (KFIU) that limits exchange operations, trading anonymity, and fiat on-ramps. Also known as Korea crypto crackdown, these rules are among the most aggressive in Asia, targeting money laundering, tax evasion, and speculative trading. Unlike countries that outright ban crypto, South Korea allows trading—but only under heavy supervision. Exchanges must register with the government, enforce real-name verification, and report all transactions. Even then, many platforms have shut down or moved operations offshore.

The KFTC crypto rules, the set of guidelines enforced by the Korea Fair Trade Commission that bans misleading marketing, unlicensed token sales, and pump-and-dump schemes. Also known as KFTC crypto guidelines, it has cracked down on crypto influencers promoting fake airdrops and fake staking rewards. In 2023, the KFTC fined several local influencers over $1 million for promoting unregistered tokens. Meanwhile, crypto exchanges South Korea, licensed platforms like Upbit, Bithumb, and Korbit that must comply with strict KYC, AML, and capital reserve requirements. Also known as Korean crypto exchanges, they can’t offer leverage trading or margin positions to retail users. Banks often freeze accounts linked to crypto activity, making deposits and withdrawals a hassle.

Despite the rules, crypto use hasn’t disappeared—it’s just gone underground. Many Koreans use peer-to-peer platforms like Paxful and LocalBitcoins, or trade via decentralized exchanges like Uniswap with VPNs. Stablecoins like USDT and USDC are popular for moving value without triggering bank alerts. Some traders even use crypto gift cards bought overseas to bypass restrictions. The government keeps tightening rules, but demand stays high. Younger users see crypto as a way to escape stagnant wages and inflation, while older investors treat it like gold—something to hold when the won weakens.

What you’ll find in the posts below are real stories from people who’ve navigated these restrictions: how they kept trading when banks blocked them, why some exchanges vanished overnight, and how scams prey on people trying to bypass the rules. You’ll also see how South Korea’s policies compare to Taiwan’s, China’s, and even Sweden’s—because when one country shuts the door, traders find another window.