Crypto Traders On Edge As Korea Stalls Key Law — Is The “Kimchi Premium” At Risk Next?

The National Policy Committee of Korea pushed the “second‑phase” crypto act debate until after the June 3 local elections.

Lawmakers sent five finance-related bills to the subcommittee that day: the Framework Act on Administrative Regulation, the Credit Information Protection Act, the Microfinance Support Act, the Insurance Business Act, and the Capital Markets Act. Not a single bill related to crypto was included, but the Political Affairs Committee’s plenary session received Representative Kim Nam-geun’s “Partial Amendment to the Act on the Protection of Virtual Asset Users, etc.” and forwarded it to the Bill Review Subcommittee.

Lawmakers opted to park the second‑phase bill during a sensitive election window rather than ram through divisive provisions on banks and exchange tycoons, which have become “core landmines” in the legislative process. Speculation in Korean political coverage suggest that the presidential office and the Financial Services Commission (FSC) are not fully aligned on how far to push ownership caps and how tightly to ring‑fence stablecoin issuance, adding to the deadlock narrative.

The proposed crypto framework comes at a time of major importance, as the aforementioned political disagreements also happen to be the two key fights occurring between major players in the Korean cryptocurrency and financial industry.

South Korea has recently seen a tug‑of‑war between The Bank of Korea and the FSC over who gets to issue won‑denominated stablecoins.

We need the bill to be finalized quickly to determine our business direction, but currently, we are keeping all possibilities open, which is only increasing the cost burden.

For existing giants like Upbit and Bithumb, this is a post‑facto rule. Founders and early backers already hold stakes well above 20%, so a hard cap would force them to sell down significant portions of their equity over a three‑year transition (six years for some smaller exchanges). This could potentially disrupt ongoing M&A and reshape control of the local market.

Near term, rule uncertainty around KRW stablecoins and exchange ownership could keep Korean venues’ risk premia high and make local listing or market‑making plans harder to model. Post‑election, a bank‑heavy stablecoin framework plus tighter governance rules could favor well‑capitalized incumbents and banks over smaller, high‑beta platforms. This could reshape liquidity and altcoin listings.

Lawmakers watering down ownership caps or opening up stablecoin issuance beyond banks would be a clear risk‑on signal for KRW‑denominated products and for global firms eyeing Korea’s retail base.

Cover image from Perplexity. BTCUSDT chart from Tradingview.