South Korea Weighs Green Light for Foreign Crypto Investment Under AML Safeguards

South Korea is considering allowing foreign investors to participate in its domestic cryptocurrency market, provided they comply with anti-money laundering (AML) regulations. The potential policy shift could open one of Asia’s most active crypto markets to international traders while maintaining strict oversight to prevent illicit financial activities.

Regulatory Considerations

The South Korean Financial Services Commission (FSC) is reviewing changes that would permit foreign investors to access local crypto exchanges if they meet specific AML requirements. Currently, South Korea’s crypto trading ecosystem is largely restricted to domestic residents due to stringent compliance rules, including the use of real-name bank accounts linked to local financial institutions.

Under the proposed changes, foreign investors may be required to:

• Undergo identity verification and meet Know Your Customer (KYC) standards
• Provide proof of compliance with AML regulations from their home countries
• Use bank accounts that adhere to South Korea’s financial reporting requirements

Potential Impact on the Crypto Market

1. Increased Market Liquidity – Allowing foreign investment could boost trading volume on South Korean exchanges, which are among the most active globally.
2. Stronger Regulatory Oversight – The move aligns with South Korea’s broader efforts to enhance crypto transparency and prevent illegal financial activities.
3. Competitive Edge for South Korean Exchanges – Domestic platforms like Upbit, Bithumb, and Korbit could attract more international users, strengthening their market position.

Regulators are expected to assess the risks and benefits of opening the market to foreign investors before finalizing any decisions. If approved, the policy change could reshape South Korea’s role in the global crypto industry by making its exchanges more accessible to international traders while reinforcing compliance measures.