South Korea's crypto industry continues to face regulatory bottlenecks. Due to the prolonged delay in finalizing relevant legislation, the Financial Intelligence Unit (FIU), responsible for reviewing virtual asset service providers, has adopted a more conservative approach, resulting in a significant drop in the number of approved new entrants and a marked increase in review times.
The review process has become significantly longer, with some businesses still not approved after more than 600 days.
According to reports , only two businesses completed their applications and were approved to operate in 2025, a near 50% drop compared to the four approved in 2024. Even though the system is nominally an application system, businesses cannot operate unless the FIU (Financial Information Unit) completes its processing, effectively making it a de facto licensing system.
Not only has the number of approved businesses decreased, but the review time has also continued to lengthen. The FIU takes an average of 16 months to process a VASP application, up from 11 months the previous year. For example, blockchain security provider BloSafe has waited over 600 days from application to approval. Industry insiders point out that many businesses are still forced to postpone their operations in South Korea due to the prolonged delays in obtaining approval.
The commencement of license renewals for major exchanges signals a shift in regulatory attitude.
In contrast to the obstacles faced by new entrants, the FIU has recently shown signs of loosening its grip on the license renewal of existing large exchanges. At the end of last year, the FIU approved Dunamu, the operator of Upbit, South Korea's largest exchange, to complete its VASP qualification renewal. Dunamu's license had already expired, and the renewal process had been stalled for over a year until the FIU completed its penalty proceedings last November, imposing a fine of 35.2 billion won on the company before officially allowing it to proceed.
Currently, major exchanges such as Korbit, Bithumb, Coinone, and Gopax have all submitted their update applications. Korbit, having already received a penalty notice from the FIU, is considered by the market to be the next likely candidate to be granted an update.
This article, titled "South Korean Crypto Asset Newcomers Halved, FIU Review Extended to 16 Months," first appeared on ABMedia ABMedia .
