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South Korea's financial regulator is seeking to allow institutional participation in the cryptocurrency market this year, calling the move a prerequisite for the next phase of digital asset legislation aimed at reshaping a market now dominated by retail traders. Speaking at a judicial training program at the Seoul Southern District Court, Shim Won-tae, an official in the Virtual Asset Division of the Financial Services Commission's (FSC) Digital Finance Policy Bureau, said corporate participation in the crypto market was among the agency's priorities for the year, according to Herald Business. A market limited to retail investors would be at odds with the planned second phase of crypto legislation, he said, describing broader institutional access as a necessary first step.Photo by Mohammad Dadkhah on UnsplashStock token tax rules under reviewThe comments come as policymakers weigh the tax treatment of security tokens. A Ministry of Economy and Finance official said that the government currently regards stock tokens as securities, which could allow them to be taxed under the existing Capital Markets Act if the FSC adopts the same view, Bloomingbit reported. The outlet said taxation could begin later this year if the FSC clarifies the status of stock tokens in a planned July update to security token guidelines and implementing rules. Market conditions have added urgency to the debate. At a National Assembly forum on June 11 marking the first anniversary of the Lee Jae-myung government, Hong Sung-kook, who chairs the ruling Democratic Party's National Economic Advisory Council, flagged two urgent risks: the recent sharp sell-off in the crypto market, which counts an estimated 10 million Korean investors, and a weaker won, according to Digital Asset. He also warned of inflation risks from a prolonged Iran war and a semiconductor boom. South Korea should work to stabilize equities, real estate and digital assets, and prepare for policy shifts by the Trump administration after the war, he said. LG turns to Arbitrum for adsIn a sign of corporate blockchain adoption, LG Electronics is developing an Arbitrum-based network to automate the buying and selling of advertising, Fortune reported. The platform records ad inventory and user-response data on-chain and lets software settle transactions on its own. LG ran a pilot with a Japanese advertising agency and plans to weigh commercialization of the ad platform in the second half of this year. Arbitrum co-founder Steven Goldfeder described it as software running the advertising market. Investor sentiment, meanwhile, stayed bearish. In CoinNess and Kratos's weekly survey of South Korean investors, conducted June 9–12, 65.7% expected Bitcoin to fall in the week ahead, up from 58.8% in the prior poll, while 13.7% looked for gains, down from 17.7%, and 20.6% expected sideways trading, down from 23.5%. Bearish expectations held the majority, and both the bullish and sideways camps thinned from a week earlier. Asked whether Bitcoin had bottomed after it briefly slipped below $60,000 on June 6, the largest share (38.8%) said it had not and expected further declines. Another 28.6% allowed for a short-term rebound but not a trend reversal, 20.1% judged the bottom was in and called it a buy-the-dip opportunity, and 12.5% were unsure. According to CoinMarketCap data at publication time, Bitcoin was trading at $63,456.42, down 0.23% over the past week. 

South Korean internet giant Naver has announced that it is monitoring and removing blog posts that promote unregistered virtual asset service providers (VASPs).Photo by Pixabay on PexelsUnregistered status makes promotions illegalAccording to Digital Asset, a Naver official said the practice reflects the fact that unregistered VASPs are subject to criminal penalties, meaning advertisements or promotional content related to them could potentially violate the law. This marks the first instance of Naver publicly confirming its stance on advertising for unregistered crypto platforms. The official noted that this measure had already been implemented before the financial regulator issued a press release in December warning of the illegality of such activities. In December, the Financial Intelligence Unit (FIU) of the Financial Services Commission (FSC) said that referral activities promoting unregistered VASPs through blogs and social media constitute an illegal crypto business. The regulatory clarification prompted influencers on platforms such as Telegram and YouTube to discontinue referral promotions related to these exchanges. Google Play to remove unregistered exchangesIn a parallel move, Google has revealed plans to cease support for unregistered crypto exchange apps on its Google Play Store. Google Korea said the decision was made voluntarily to align with its operational policy of complying with regulations in different jurisdictions. As a result, unregistered platforms will be removed from the Korean market in accordance with the FIU's regulatory rules. Beyond marketing restrictions, scrutiny of crypto exchanges is intensifying as the FSC moves to strengthen oversight. The regulator is reportedly devising a rule that would hold platforms liable for hacking incidents under a strict liability framework, meaning liability could be imposed even in the absence of negligence. According to MTN News, the financial authority is considering penalties of up to 10% of a platform’s revenue for such incidents. However, industry participants have argued that the proposed regulation is excessively harsh. One crypto industry source highlighted the disparity, pointing out that the potential 10% fine is more than three times higher than the maximum 3% penalty imposed on traditional fintech companies. Traditional finance eyes stablecoinsAmid this regulatory tightening, the traditional financial sector is positioning itself within the stablecoin segment. Banks are reportedly discussing whether to seek permission to offer yields on stablecoins, provided these fiat-pegged assets are issued by bank-led consortia. Citing industry sources, Electronic Times Internet reported that the Korea Federation of Banks (KFB) recently held a closed-door meeting with member institutions. The agenda focused on a coordinated response to upcoming regulations governing won-backed stablecoins, which form part of the second phase of South Korea’s digital asset legislation. Discussions included a review of the KFB’s ongoing research into won-backed stablecoins, commissioned to McKinsey & Company. The report, currently at its midpoint and scheduled for release in early February, will examine the feasibility of bank-led stablecoin issuance and explore potential use cases. This move is widely seen as an effort by the banking industry to secure customers and liquidity early on, while protecting its competitive advantage as a group of traditional lenders. The push by traditional financial institutions into stablecoin-related sectors is becoming increasingly concrete. According to another MTN News report, Shinhan Securities has formed a strategic partnership with Etherfuse, a tokenization platform that converts real-world assets (RWAs) into digital tokens. The partnership aims to collaborate on the issuance of "stablebonds" backed by government bonds. The planned issuance will use the ticker KTB, with Shinhan Securities acting as a brokerage responsible for securing and managing the underlying assets rather than serving as the issuer. Similarly, Hana Financial Group has established a stablecoin consortium including BNK Financial Group, iM Financial Group, Standard Chartered Bank Korea, and OK Savings Bank. According to local media outlet News1, the participants plan to raise funds to establish a special-purpose company that will later issue a stablecoin.These developments come as financial authorities move to use legislation to restrict early-stage stablecoin issuance to consortia in which banks hold at least a 50% stake plus one share, citing concerns over market stability.

Upbit Operator Dunamu Assists Indebted Youths in Rebuilding Credit ScoresDunamu, the operator of South Korean cryptocurrency exchange Upbit, has announced an initiative aimed at helping indebted youths rebuild their credit scores. The company will accept applications from July 19 through August 20. Eligible individuals must be residents of Seoul, Gyeonggi-do, or Incheon, aged between 19 and 39, and have successfully completed debt workout arrangements.Photo by Towfiqu barbhuiya on UnsplashGiving backThe project, called Dunamu Next Dream, is part of the company’s efforts to give back to the community by using revenue generated from Luna Classic (LUNC) transaction fees. In September of last year, Dunamu committed to allocating the LUNC transaction fee profits of 239.13025970 BTC to investor protection. After consulting with an external advisory committee, the exchange operator decided to donate around 3 billion KRW ($2.3 million) to public organizations and utilize the remaining funds to provide financial and credit support.To implement the Dunamu Next Dream project, Dunamu entered into a memorandum of understanding (MOU) with the Credit Counseling and Recovery Service (CCRS) and the Social Solidarity Bank (SSB) in April.Two componentsThe project consists of two main components: financial consulting and emergency loans. The initial focus will be on financial consulting, which includes support for living expenses. The aim is to assist indebted youths in developing healthier financial habits. Financial experts will provide six sessions of financial consulting, addressing their recurring indebtedness and fostering financial independence. Additionally, each individual will be granted a living expense of 1.2 million KRW ($950) to ensure they can meet timely interest payments.Dunamu will collaborate with the CCRS and the SSB to conduct a comprehensive review of applicants and select 150 deserving beneficiaries. The selection process will involve thorough evaluation through paper screening and interviews, allowing applicants to demonstrate their dedication and financial responsibility.The second component of the project, emergency lending, will launch in September. It aims to provide interest-free loans of up to 2.5 million KRW to individuals facing immediate needs, such as medical fees.Dunamu CEO Lee Sirgoo highlighted the importance of this project, emphasizing the challenges faced by young people who are the future leaders of society. The economic struggles they encounter can have significant repercussions for society as a whole. Accumulating debts has made it difficult for young individuals to achieve financial stability and advance their careers. Lee stressed the need for public awareness regarding this issue, as it is crucial for young people to establish themselves promptly within society.