Catenaa, Sunday, April 13, 2025-South Korea Financial Services Commission (FSC) is exploring a policy shift that could allow foreign investors to access the country’s Crypto market, provided local exchanges meet stringent anti-money laundering (AML) regulations. Kim Sung-jin, head of the FSC’s virtual asset division, expressed support for permitting overseas participation in South Korea’s crypto ecosystem during a seminar at the National Assembly on Wednesday.
Foreign investors are currently barred from trading on South Korean exchanges due to strict know-your-customer (KYC) rules, which mandate users to link their accounts to local bank accounts. This policy excludes non-residents. Kim’s remarks come amid growing global competition in the crypto space, particularly from the U.S., and reflect South Korea’s desire to attract global capital.
Opening the market could also eliminate the “Kimchi Premium,” the phenomenon where cryptocurrencies are traded at higher prices on Korean exchanges due to limited foreign liquidity. However, regulatory concerns, particularly regarding exchanges’ AML capabilities, remain a significant barrier.
South Korea implemented the Travel Rule in 2022, aligning with Financial Action Task Force (FATF) guidelines, which requires exchanges to collect and retain detailed information on crypto transfers above a certain threshold.
