South Korea moves to regulate crypto firms as BitGo wins first foreign license

South Korea is intensifying its cryptocurrency regulatory framework. BitGo Korea has secured the country's first foreign virtual asset service provider license, partnering with Hana Financial Group and SK Telecom. Concurrently, lawmakers have introduced a bill to expand the Financial Intelligence Unit's authority to investigate unregistered crypto firms, addressing a gap where police suspended 23 of 25 investigations. Additionally, the Democratic Party plans to implement a 22% virtual asset tax starting January 1, 2027, despite pending basic digital asset legislation.

BitGo Korea VASP registration

• ▪BitGo Korea, the local unit of global digital asset infrastructure company BitGo, received approval from South Korea's Financial Intelligence Unit to operate as a virtual asset service provider, making it the first foreign digital asset firm to earn this status.
• ▪The Financial Intelligence Unit's approval allows BitGo Korea to provide virtual asset transfers, custody, and management services in South Korea.
• ▪BitGo Korea Chief Executive Officer Chen Fang stated that establishing a local entity was necessary to validate the company's technology and systems within South Korea's regulatory framework.
• ▪Hana Financial Group and SK Telecom hold stakes of 25 percent and 10 percent, respectively, in BitGo Korea as part of strategic partnerships.

FIU enforcement authority expansion bill

• ▪South Korean People Power Party lawmaker Eom Tae-young and nine other lawmakers introduced a bill on August 20, 2026, to expand the Financial Intelligence Unit's authority to investigate unregistered crypto businesses.
• ▪Between August 2022 and August 2025, South Korean police suspended investigations or preliminary inquiries into 23 of 25 unregistered virtual asset service providers referred by the Financial Intelligence Unit.
• ▪The proposed bill would amend the Act on Reporting and Using Specified Financial Transaction Information, allowing anyone to report suspected unregistered crypto operators directly to the Financial Intelligence Unit.
• ▪Under the proposed legislation, the Financial Intelligence Unit could investigate alleged violations, request criminal investigations, or provide information directly to investigators.

Virtual asset taxation timeline

• ▪The Democratic Party justified proceeding with the virtual asset tax based on the principle that income should be taxed wherever it arises.
• ▪South Korea's Democratic Party plans to proceed with a 22% tax on virtual asset investment gains starting January 1, 2027, with no current discussions to extend the tax delay.

South Korea crypto regulatory framework

• ▪South Korea's basic digital asset legislation remains incomplete, with approximately 10 related bills pending in the National Assembly, leaving the market largely without finalized rules on issuance, distribution, and disclosure.
• ▪As of June 2026, South Korea's Financial Intelligence Unit reported that 28 virtual asset service providers were registered, while 40 suspected illegal operators had been referred to investigative authorities.