South Korea’s Crypto Sector Scores a Backdoor Victory—Election Results Be Damned

While politicians bicker over regulatory frameworks, Seoul’s crypto industry just pulled off a quiet coup. Market momentum trumps policy paralysis yet again.

Behind the scenes: exchanges are ramping up institutional partnerships, defying the regulatory gray zone. Local traders shrug—volatility pays better than stability anyway.

The kicker? This ’win’ required exactly zero legislative approval. Somewhere, a Goldman Sachs alum just shed a single tear into their whiskey.

Presidential Candidates Lee and Kim Aligned on Legalising Spot Crypto ETFs

Lee has advocated for legalising spot crypto exchange-traded funds (ETFs) and further hopes to be able to invest the country’s $884 billion national pension fund into cryptocurrencies.

Moreover, he also plans to modernise South Korea’s financial system by issuing stablecoins backed by the South Korean won. During a policy discussion meeting in May, he had said, “We need to establish a won-backed stablecoin market to prevent national wealth from leaking overseas.”

Additionally, Lee has also advocated for loosening some of the banking restrictions that required crypto exchanges to partner up with licensed banks to offer fiat services.

However, some of the reforms proposed by Lee have faced backlash in the region. The Bank of Korea Governor Rhee Chang-yong has cautioned against stablecoins issued by non-banking institutions.

He explained that doing so WOULD undermine the effectiveness of the monetary policies of the country. He has advocated for the central bank to be the only institution to be able to create won-backed stablecoins.

Kim, on the other hand, also supports legalising spot crypto and has lent his support to Lee in this matter in a rare moment of bipartisan alignment. Furthermore, similar to Lee, Kim also plans to ease regulations and expand crypto adoption.

A poll conducted on 28 May 2025 by Gallup Korea, a South Korean research company specialising in public opinion surveys and market research, revealed that 49% of the respondents favoured Lee, while 39% of the respondents picked Kim as their presidential candidate.

: 10+ Crypto Tokens That Can Hit 1000x in 2025

Increased South Korean Crypto Participation Hastened Crypto Regulations

South Korea’s increased retail crypto participation, along with its experience in the past with crypto frauds, hastened new regulations through which the country intends to ensure greater transparency, security, and trust in the cryptocurrency ecosystem.

Strict regulations (Virtual Asset User Protection Act) were brought into focus in July 2024. They imposed strict requirements on crypto exchanges that included potential life sentences for criminal violations.

South Korea’s Financial Services Commission, on 20 May 2025, established new regulations for non-profit crypto transactions and tightened listing criteria for exchanges.

Furthermore, the South Korean Democratic Party kick-started a Digital Asset Committee to develop crypto policies and promote industry growth.

: 9+ Best High-Risk, High-Reward Crypto to Buy in June 2025

Key Takeaways

• Presidential candidate Lee hopes to invest South Korea’s $884 billion national pension fund into cryptocurrencies
• Both presidential candidates Lee Jae-myung and Kim Moon-soo are aligned in legalising spot crypto ETFs
• Candidate Lee plans to modernise South Korea’s financial system by issuing stablecoins backed by the South Korean won