South Korea crypto regulatory framework comes into effect

South Korea's cryptocurrency regulatory framework came into effect in July 2024, requiring local crypto exchanges to store at least 80 percent of users' coins in cold wallets, held separately from the exchanges' own funds¹. The Financial Services Commission, which oversees finance in the country, introduced several other measures for crypto exchanges to follow, according to an account of the rules¹.

The framework followed an earlier period in which South Korea considered banning trades conducted from anonymous bank accounts, a proposal that at the time coincided with Bitcoin falling by $2,000 in value¹. The country later changed its stance and no such ban was put in place; instead, rules were introduced for both crypto users and crypto service providers¹. The same account states that people in South Korea can hold and trade cryptocurrency as a result of the 2024 regulations¹.

The crypto rules sit alongside a separate and stricter position on gambling. Online gambling is prohibited in South Korea and the ban is strictly enforced, with authorities stating that those caught gambling online can face penalties¹. Internet censorship aimed at tracking down and blocking the IP addresses of offshore online casino sites is described as pervasive, and the same account says some financial institutions have started blocking transactions to and from online gambling related websites, though it adds that this could not be confirmed¹.

Land-based gambling is not prohibited in the same way, but the account states that it is available at one casino only and that locals are not allowed to access brick-and-mortar casinos across the country¹. For players who use offshore sites, Bitcoin is described as the preferred payment method among players from South Korea, and as an option at most, if not all, online casinos that cater to South Korean players¹. The same account says there are over 40 online casinos catering to Korean players that accept BTC, and lists Huobi, Binance and UpBit as eligible exchanges for buying coins, with MoonPay, PayPal and Neteller named as methods that offer Bitcoin¹.

What it means for players

The 80 percent cold wallet requirement applies to coins held on local exchanges, not to coins a player has already moved to a personal wallet¹. That distinction matters for anyone in South Korea who buys crypto on a domestic exchange and then transfers it elsewhere.

For gambling specifically, the regulatory position has not changed. Online gambling remains prohibited in South Korea and the ban is strictly enforced, and the authorities have said those caught gambling online can face penalties¹. Locals are not allowed into brick-and-mortar casinos, and the account states that land-based gambling is an option at one casino only¹. Visitors and expats face the same online prohibition, though the source does not set out how enforcement differs by residency status.

The account also notes that the crypto framework gives authorities better insight into crypto trading, which it says means players could still be caught¹. It states that some financial institutions have begun blocking transactions to and from online gambling related websites, while noting this could not be confirmed¹.

What happens next

No further dated steps are given. The account does not report any scheduled review of the crypto framework, any change to the online gambling ban, or any new enforcement measures with a stated date¹.