South Korea imposes new ‘regulatory’ fees on cryptocurrency exchanges

South Korea has introduced new supervisory fees for cryptocurrency exchanges. The regulations have affected major players such as Upbit and Bithumb. Starting next year, these exchanges will have to pay these fees under updated regulations announced by the Financial Services Commission on July 1. The new regulations are part of the amended “Implementation Decree of the Act on the Establishment of the Financial Services Commission” and the “Regulations on the Collection of Contributions by Financial Institutions.”

Under the new rules, virtual asset operators must pay supervisory fees for FSS inspection. The total fee for the four largest exchanges is expected to be around 300 million won ($220,000). Of that amount, Upbit, which is the largest exchange, is expected to account for more than 90% at around 272 million won ($199,592).

Bithumb will pay around 21.14 million won ($155,157). Coinone and GOPAX will pay around 6.03 million won ($4,422) and 830,000 won ($608), respectively. Korbit is excluded from these fees due to lower revenue.

These fees will create a form of quasi-tax for financial institutions that pass FSS inspections. The payment is mandatory for any company with operating revenues of 3 billion won or more. This is significantly faster compared to previous industries, indicating a rapidly growing cryptocurrency market and increasing regulatory scrutiny.

New law mandates 80% of crypto assets to be stored in cold wallets in South Korea

The short implementation period came as a surprise to insiders who were expecting a longer period. While larger exchanges like Upbit and Bithumb can absorb these costs, it could pose additional challenges for exchanges like Coinone and GOPAX, which are currently struggling financially. These fees come at a time when South Korean exchanges are seeing a 30% drop in trading volumes.

The new law also requires exchanges to keep at least 80% of user assets in cold wallets. Exchanges will also ensure that these assets are not mixed with company funds. These exchanges must also review the listed assets and make sure they meet current standards or risk delisting.

The update follows a delay in the introduction of a 20 percent tax on cryptocurrency profits by South Korea’s Ministry of Economy and Finance, which may be postponed until 2028.