South Korea Finance Minister Says No Bitcoin and Cryptocurrency Ban

The finance ministry deployed customs agents to track illegal foreign exchange flows through cryptocurrency channels and started cracking down on exchanges. Authorities fined UpBit and Korbit, two of the country's largest trading platforms, for weak security protocols. They also targeted traders exploiting price gaps between South Korea's crypto markets and global exchanges.

Last week, customs officials uncovered roughly $596 million in foreign exchange violations, with illicit cryptocurrency trading accounting for more than 80 percent of that total. Authorities shut down and fined several criminal networks running fraudulent schemes inside South Korea, including an unlicensed forex operation.

Regulators cite the sheer scale of South Korea's crypto market as justification for the oversight. Fair Trade Commission chairman Kim Sang-jo had previously noted that banning trading would be unfeasible given the market's size and expansion. Daily trading volumes on Korean crypto exchanges now exceed those on the country's stock exchange.

"Banning cryptocurrency exchanges is not realistically possible," Kim Sang-jo said. "Under electronic commerce law, the government doesn't even have the authority to shut down such platforms. From an economic standpoint, outright banning an activity is neither fair nor transparent. Gains and losses belong to the investor, whether speculation is excessive or not."

Banks are moving in the opposite direction. Six major banks, including Shinhan Bank, South Korea's second-largest, have begun providing banking services and virtual accounts to crypto exchanges. Platforms that paused new user registrations weeks ago should soon resume taking applications once the regulatory framework solidifies.

Traders view the government's stance and enforcement action as a turning point. With clearer rules and banking partnerships expanding, new participants should enter exchanges and drive higher trading volumes.