South Korea’s Financial Services Commission (FSC) has said it would look into letting crypto exchanges trade token securities.
Meanwhile, the FSC’s anti-money-laundering arm defended a six-month penalty against Bithumb in court, and the central bank has set out plans to widen cross-border balance reporting.
Will crypto exchanges start trading token securities?
FSC Chairman Lee Eog-weon told a National Assembly Political Affairs Committee audit that he was open to the idea of allowing token securities be traded through crypto exchange infrastructure.
Rep. Lee Kang-il of the ruling Democratic Party argued that restricting certain exchange types from the market makes little sense when the same securities rules and investor-protection requirements apply across the board.
Lee said he would take things like market conditions and investor protection into consideration. He will also consider whether licensing units should be merged and how concurrent operations might work.
He pointed to the United States as a reference. In September, the U.S. Securities and Exchange Commission (SEC) announced an “Innovation Exemption” that lets qualifying on-chain platforms, crypto exchanges included, trade tokenized versions of some US-listed stocks.
Cryptopolitan reported that the amendments to the Electronic Securities Act and the Capital Markets Act that put token securities on a legal footing take effect February 4, 2027.
The FSC’s subordinate rules would let stocks, bonds and funds trade in tokenized form from that date. Separately, Lee told a parliamentary hearing that consultations on the broader Digital Asset Basic Act were in their final stages.
Why is Bithumb challenging the FIU?
At the same time, the FSC’s anti-money laundering department called the Financial Intelligence Unit (FIU) was in court defending a crackdown. Bithumb challenged an FIU sanction, and the Seoul Administrative Court held the first oral argument on Thursday.
The FIU says Bithumb processed 45,772 transfers with 18 unregistered overseas virtual asset providers between August 28, 2022 and April 3, 2025. Bithumb was awarded a fine of 36.8 billion won (about $24.5 million) and also got hit with a six-month partial business suspension that stopped new customers from moving their digital assets off the platform.
Bithumb’s lawyers argued that it did nothing wrong. For transfers of 1 million won (about $700) or more, they said the travel rule automatically blocked sends to unregistered providers, so no violations occurred.
For smaller transfers, the exchange said it had no legal right to collect details about the receiving exchange. It also said the FIU never made clear what blocking measures it expected.
Bithumb also pointed out that Chainalysis, the screening tool regulators cited, is a private foreign company, and Bithumb had no legal duty to use it. It added that only about 2% of the addresses it couldn’t identify later turned out to belong to unregistered providers.
The company’s arguments are similar to those used in a case from April 2026 when the same court canceled the FIU’s three-month suspension of Dunamu, the company behind Upbit, ruling that the rules for small transfers weren’t specific enough.
Bithumb will submit its written arguments by mid-December, and the next hearing is on January 28, 2027.
What is the Bank of Korea introducing?
Starting December 2, any user of a domestic exchange who has ever sent digital assets to an overseas exchange or a private wallet will have their month-end holdings reported to the Bank of Korea’s foreign exchange information network. This applies even in months when they made no transfers.
A reporting manual obtained by Rep. Park Soo-young of the People Power Party shows the bank is creating a new filing called FX1021. It will include the amount of each asset held at month-end, its value converted to won, and the total amounts sent in and out.
Users are covered if they have moved digital assets abroad or to a private wallet at any time since July 19, 2024, the day the Virtual Asset User Protection Act took effect. Exchanges must file each report by 5:30 p.m. on the 10th of the following month.
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