South Korea Moves to Open Crypto Market for Foreign Investors

Highlights:

• South Korea may allow foreign investors to trade crypto if exchanges follow anti-money laundering rules.
• New rules could bring more liquidity to the crypto market and reduce restrictions on foreign traders.
• Authorities are focusing on strong anti-money laundering measures while exploring ways to open the market to global investors.

The Financial Services Commission (FSC) of South Korea is considering easing restrictions that prevent foreign investors from trading on local cryptocurrency exchanges. During a recent seminar at the National Assembly, Kim Sung-jin, the head of the FSC’s virtual asset division, indicated that the commission might revise its rules if exchanges meet specific anti-money laundering (AML) requirements.

🚨 ALERT: SOUTH KOREA EYES FOREIGN CRYPTO TRADERS WITH STRONGER AML MEASURES! 🇰🇷

South Korea may soon welcome international investors into its crypto market if local exchanges improve anti-money laundering (AML) protocols. The move would align South Korea with global crypto…

— CryptoKing (@Crypto_China) April 3, 2025

Currently, there are major obstacles for foreign traders trying to access South Korean crypto exchanges. All exchange users are required to register with a real name bank account in the country per the existing rules. The measures are part of a wider push to keep tight control over financial dealings relating to digital assets. Officials are now looking into ways to allow foreign participation under the AML framework.

Changes Could Expand Market and Increase Liquidity

The possible easing off of restrictions could bring extra activity to the South Korean crypto market. According to Peter Chung, head of research at Presto, allowing foreign investors to trade in local exchanges may boost the industry. In addition, it may introduce liquidity to USD stablecoins.

The strict capital control measures are one of the biggest challenges that have affected South Korea’s crypto market. These policies limit investment by foreign investors and affect portfolios within the country. According to Chung, opening the market to international traders will lift the limitations and enhance the market efficiency as a whole. The potential policy change would also help narrow the kimchi premium, a price difference that exists between South Korean exchanges and global platforms due to restricted liquidity.

Officials believe exchanges must demonstrate the ability to meet AML requirements. If they do, foreign investors could safely participate in the market without increasing risks. The move is in line with South Korea’s plan to promote innovation in the digital asset sector while ensuring transparency on digital asset transactions in the long term.

Industry experts argue that some of these restrictions need to be lifted to create a more competitive trading environment and attract institutional investors seeking exposure to the region’s growing crypto ecosystem.

AML Rules and Enforcement Actions Shape Market Direction

South Korea has been enforcing measures against exchanges. Exchanges are required to collect and store details regarding transactions exceeding one million won by the Travel Rule. The move followed recommendations from the Financial Action Task Force (FATF) to improve the monitoring of cross-border crypto transactions.

As a part of crypto enforcement for AML compliance, South Korea’s Financial Intelligence Unit (FIU) recently took action against Upbit, one of the biggest crypto exchanges in the country. Authorities had suspended the platform for processing transactions with unregistered foreign exchanges. Nevertheless, Upbit managed to get a court injunction to delay the enforcement of the penalties.

South Korean authorities also have urged major tech companies to block access to unregistered crypto exchanges. Just recently, Google restricted 17 such platforms, including KuCoin, MEXC, Phemex, XT, CoinEx, BitMart, and Poloniex. The country is committed to making sure only registered and compliant exchanges operate in its market.