- Virtual Assets Committee has not held a meeting since May.
- Regulator had been due to let companies trade crypto by end of 2025.
- Government is the cause of delays, say insiders.
South Korea’s once-vaunted crypto regulator appears to have been abandoned, a year after its launch.
The South Korean newspaper Kookmin Ilbo reported that the Virtual Assets Committee, or VAC, has not held a single meeting since May.
This is putting the brakes on plans to let corporations create Bitcoin treasuries, anonymous sources told the publication.
An unnamed industry insider claims the government is probably behind the delay.
“Regulators’ current top priority is encouraging money to flow into the domestic stock market,” the insider said. “The government likely doesn’t want to prioritise anything that will distract from that. And that is probably why deregulation is being delayed.”
The notion that the committee is already obsolete, after holding its first meeting in November last year, goes to show how fast crypto-related policy is changing in South Korea.
President prioritises stock market
Shortly after the VAC held its first meeting in 2024, former South Korean president Yoon Suk-yeol attempted to declare martial law.
Yoon’s efforts ended in failure, and he was impeached soon after, with his political arch-rival Lee Jae-myung taking power in June.
But Lee’s administration has taken a very different approach to crypto policy. Lee is a staunch advocate of letting companies issue KRW-denominated stablecoins. And soon after his election, he threatened to disband the Financial Services Commission, the VAC’s parent organisation.
He later softened his stance, and his administration now seems keen to let lawmakers and the Financial Services Commission, or FSC, work together on crypto regulation, leaving the VAC out in the cold.
After its last meeting in May, the VAC fell into inactivity. Its chair ordered a meeting in October, but this was ultimately postponed by the FSC, with the parties subsequently failing to reschedule.
No further VAC discussions have been held in the second half of the year, Kookmin Ilbo noted.
The newspaper suggested that this may have been by design. After the May meeting, the VAC and FSC discussed guidelines for corporate crypto trading. At present, regulatory guidelines block crypto exchanges from offering corporate crypto trade-related services.
Regulator’s roadmap
In February, the FSC approved a roadmap that, if followed, would have allowed 3,500 stock market-listed non-financial sector companies to buy Bitcoin and other tokens by the second half of 2025.
The regulator said it would begin a pilot for “certain institutional investors starting in the second half of the year.” But with just days left of the year, and no VAC meetings scheduled, the likelihood of this happening is now vanishingly small.
Another unnamed crypto industry insider told the newspaper that yet another year was about to pass without letting companies buy crypto.
“This is causing domestic businesses to lose their competitiveness [in relation to the US and Japan, where many companies are free to trade crypto],” the insider said. “And the South Korean crypto industry is also losing out.”
Tim Alper is a news correspondent at DL News. Got a tip? Email at tdalper@dlnews.com.
