As cryptocurrency trading remains highly active in South Korea, regulators are moving to tighten oversight on how investors access digital assets. The country’s Financial Services Commission (FSC) is reviewing an amendment to the Credit Finance Act that would ban citizens from using credit cards to purchase cryptocurrencies. The proposal is aimed at limiting illegal domestic fund outflows, reducing money laundering concerns, and discouraging speculative trading tied to purchases on foreign exchanges.
Focus on Foreign Exchange Access
According to the FSC notice published on January 3, virtual assets could be treated in a similar way to other restricted payment categories. South Korea’s domestic exchanges already operate under tighter compliance rules, including identity verification requirements and partnerships with local banks. Foreign platforms, however, do not face the same degree of direct oversight. If approved, the amendment would effectively block South Korean users from relying on credit cards to buy crypto through overseas venues.
Rising Trading Activity Meets Stricter Rules
The proposal comes as South Korea continues to play a major role in global crypto markets. The report notes that Upbit and Bithumb together accounted for more than 10% of global trading volumes, underscoring the scale of local demand. Against that backdrop, regulators appear to be strengthening controls at the payment layer in order to improve transparency, increase transaction security, and reduce risks linked to aggressive retail speculation.
The move may also be connected to recent tax-related findings. Under newly introduced tax rules, authorities found that South Koreans held more than $98 billion worth of crypto assets in overseas accounts as of September 2023. That figure has likely intensified official concern around cross-border holdings, capital flows, and compliance monitoring.
Public Feedback Open Until Mid-February
The amendment is currently open for public comment until February 13, 2024. According to the report, the measure is expected to be reviewed and could be implemented in the first half of 2024. If enacted, it would reshape a key funding route for Korean crypto investors—especially those using foreign exchanges—and further highlight the broader global trend toward tighter regulation of digital asset markets.