South Korea’s Crypto Transfer Shakeup: Can Fintechs Finally Break Exchange Monopolies?

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(SeaPRwire) –

By: Elena Rostova

South Korea’s crypto transfer market has a clear deadlock. Major exchanges like Upbit and Bithumb were set to dominate it. Fintech firms have been locked out, facing VASP requirements and real-name banking barriers. The new policy aims to fix this—but compliance hurdles could still block their entry.

The revised Foreign Exchange Transactions Act passed cabinet approval on June 2. It takes effect after a six-month grace period. A virtual asset transfer system launches in December. Cross-border digital asset transfers are now regulated FX activities. Registered firms must report data via Bank of Korea and register with the Ministry of Economy and Finance. Current rules cover exchanges and some custodians. The new decree may let fintechs register alongside them.

Fintechs need to meet strict compliance rules. They must have VASP reporting, network links for transaction data, and meet facility/staff rules. If they clear these, they can enter blockchain remittance and FX services. This would break the exchange-only structure. The Financial Services Commission plans to issue tokenized securities guidance in July. The final outcome depends on whether fintechs can navigate the compliance loop. If they do, the market will widen. If not, exchanges will still hold control.

Author bio: Elena Rostova, a public policy expert specializing in compliance assessments for governments and sovereign wealth funds.