South Korea is stepping up controls on crypto access — and it’s doing so on two fronts: creating a legal framework for tokenized securities while using app stores to choke off unregistered foreign exchanges. What changed on the legislative side - The National Assembly approved amendments to the Capital Markets Act and the Electronic Securities Act that formally recognize security token offerings as securities “whose issuance and distribution information is recorded and managed on a blockchain‑based distributed ledger.” - The Financial Services Commission (FSC) will lead implementation. The new rules are slated to take effect in January 2027 after a one‑year preparation period. - Regulators say the framework will enable distributed‑ledger based securities, improved account management and wider use of smart contracts — opening a regulated pathway for tokenized debt, equity and investment contract products. Where distribution enforcement is tightening - Separately, Google Play has updated its cryptocurrency app policy for South Korea: crypto exchanges and wallet providers must be registered as virtual asset service providers (VASPs) with the country’s Financial Intelligence Unit (FIU) to remain listed. - Starting January 28, Android users in South Korea will not be able to download or update apps from unregistered overseas exchanges via the local Play Store. - Only 27 domestic platforms — including heavyweights Upbit and Bithumb — have completed FIU registration. Major global exchanges such as Binance, Bybit and OKX remain unregistered and their apps are effectively blocked from new installs and updates in the South Korean Play Store. Why this matters - Google Play is a major distribution channel: Android users made up over 80% of the South Korean market as of Q3 2025. Cutting off Play Store availability substantially reduces reach for unregistered platforms. - Workarounds like web trading or APK sideloading exist but are poor substitutes for typical users when security and convenience are priorities — meaning the Play Store move will have a “practical blocking effect” for most people, according to Siwon Huh, a researcher at Four Pillars. Was this driven by government policy? - Huh says Google’s action appears to stem from the company’s own policy update, with the key test being whether an exchange holds local VASP registration. Korean regulators reportedly only began assessing the situation after Google’s enforcement. - Still, Huh warns Seoul may seize the moment to press for broader measures — potentially extending restrictions to Apple’s App Store, browsers, or even taking aim at perpetual DEX activity. The likely long‑term outcome, he suggests, is a clearer separation between regulated markets and higher‑risk, unregulated crypto activity. Other useful context - South Korea still prohibits crypto futures trading, and assets like Bitcoin held on exchanges can legally be seized under local rules. Bottom line This dual push — formalizing tokenized securities while closing distribution channels for unregistered providers — signals a shift toward a more regulated crypto ecosystem in South Korea. For global exchanges, registration will be the price of access; for users, it heightens the trade‑off between access to international platforms and the protections that come with local oversight. Read more AI-generated news on: undefined/news

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