If you hold crypto on a Korean exchange, there are five things you can check yourself: whether the exchange is registered, whether your identity verification is complete, how your assets are held, what is only a pending bill, and how gains are taxed. According to Lightspark’s overview of Korean crypto law, service providers must register with the Korea Financial Intelligence Unit and use real-name bank accounts with know-your-customer checks. The rest of this checklist shows how to confirm each point.
1. Registration and real-name verification
Lightspark states that virtual asset service providers must register with the Korea Financial Intelligence Unit (KoFIU) and obtain mandatory security certifications to operate legally. It also says providers must use real-name bank accounts for transactions and carry out strict KYC procedures.
What to do:
- Look for the exchange’s registration details on its own site, then confirm them with the regulator rather than trusting the badge alone.
- Check in your account settings that identity verification shows as complete.
- Confirm that the bank account linked to the exchange is in your own name.
A Korea Times report from August 2026 shows why this matters for foreign residents: of 566,352 foreign-held accounts at five major exchanges, only 517 had completed know-your-customer verification. An account that is opened but not verified may not be usable for trading.
2. How the exchange must hold your assets
The Virtual Asset User Protection Act took effect in July 2024. According to The Block, it requires exchanges to keep at least 80% of user crypto deposits in cold storage separate from company funds, to have licensed local banks hold customers’ cash deposits, and to maintain crypto reserves matching customer deposits in amount and type. CoinGeek adds that firms must be insured against hacking and other network accidents or set aside a reserve fund, and that they must run continuous surveillance for suspicious transactions and report it to the Financial Supervisory Service.
These are duties of the exchange. You can ask the exchange where your cash deposits are held and how its insurance or reserve is arranged. The law does not protect you from price losses or from losses caused by your own mistakes, such as sending funds to a wrong address.
3. Separate pending bills from rules in force
A second round of legislation covering digital asset issuance, stablecoins and service providers has been under discussion. Crypto.news reports that ten digital asset and stablecoin bills were pending in the National Assembly and that the Financial Services Commission planned to work with lawmakers on a consolidated bill. A Crypto Times report from July 2026 lists a Framework Act on Digital Assets as being at proposal stage, not yet law, with unresolved issues including bank ownership requirements for won stablecoins and equity ownership rules for exchanges.
Until such a bill passes and takes effect, it changes nothing about your account. When a headline says a rule is “planned”, check whether it is a proposal, a passed law with a future start date, or a rule already in force.
4. Taxes and records
Lightspark’s summary says profits from cryptocurrency trading are not currently subject to capital gains tax and that planned taxation was postponed. This is a secondary source and tax rules are a common area of change, so confirm the position with the National Tax Service or a licensed tax professional rather than relying on it.
Whatever the answer, keep records that would let an accountant reconstruct your position:
- Export transaction histories from every exchange you use.
- Note the date, asset, amount and counterparty of each transfer between wallets and exchanges.
- Keep bank statements for deposits and withdrawals.
- Record any activity that happens off the exchange, since an exchange summary will not show it.
5. Your own account security
The law places duties on exchanges, but you control your login. Sensible habits, offered as general advice rather than as a legal requirement, include using the exchange’s multi-factor authentication, typing the exchange address yourself rather than following links in messages, and treating any message asking for your password or verification codes as suspicious. If something looks wrong, contact the exchange through the official channels listed in its app.
Common mistakes and what to verify
- Assuming that a registered exchange means a risk-free one.
- Treating a news report about a bill as if it were already law.
- Skipping the identity verification step and discovering limits only when you try to withdraw.
- Relying on a single secondary source for tax treatment.
- Not keeping records of transfers between wallets.
Rules change: confirm with the official bodies
This article is general information, not legal, tax or financial advice. Korean virtual asset rules are still being developed. Confirm current requirements with the Financial Services Commission, the Financial Intelligence Unit, your exchange and the National Tax Service, and consult a qualified professional before making significant decisions.
Sources
- Is Crypto Legal in South Korea? – Lightspark – registration, real-name accounts and tax summary
- South Korea’s inaugural crypto law goes into full effect – The Block – exchange duties under the user protection act
- South Korea’s first digital asset law comes into force – CoinGeek – insurance, monitoring and enforcement
- 560,000 foreign nationals have Korean crypto accounts, but just 90 are active – The Korea Times – verification figures for foreign-held accounts
- South Korea targets November review for second-stage crypto legislation – crypto.news – pending bills
- South Korea targets September for won stablecoin bill – Crypto Times – status of the second-phase framework act