A major cryptocurrency custody provider has secured virtual asset service provider registration in South Korea, becoming the first new Korean entity established by a global digital asset company to obtain the registration ahead of the country's new regulatory framework.
BitGo Korea, the Korean subsidiary of the U.S.-based digital asset custody company BitGo, received VASP registration, allowing it to provide virtual asset custody and transfer services in South Korea. The registration comes ahead of new Korean regulations that will impose stricter requirements on cryptocurrency businesses operating in the country.
The Significance of VASP Registration in South Korea
South Korea has been tightening its cryptocurrency regulations following a series of high-profile incidents including exchange hacks, fraud cases, and the collapse of Terra/Luna in 2022. The country's Virtual Asset Service Provider registration system requires crypto businesses to meet specific standards for security, anti-money laundering compliance, and customer protection.
BitGo Korea's registration as the first new Korean entity established by a global digital asset company signals that international crypto companies see South Korea as a strategically important market despite the regulatory tightening. The registration provides BitGo with a regulatory foothold in one of Asia's largest crypto markets, where trading volumes on local exchanges have historically ranked among the highest in the world. For more on crypto regulation in Asia, see our coverage of Korean exchange revenue trends.
Custody as a Growth Market
BitGo's expansion into Korea through VASP registration highlights the growing importance of institutional custody in the cryptocurrency market. As more institutional investors, asset managers, and corporations hold cryptocurrency, the demand for regulated custody services has increased significantly. Custody providers like BitGo offer secure storage of digital assets, often using multi-signature technology that requires multiple parties to authorize transactions.
The Korean market is particularly attractive for custody providers because of its large institutional investor base and the country's growing cryptocurrency ecosystem. Korean financial institutions have been exploring cryptocurrency-related services, and regulated custody providers are positioning themselves to serve these institutions as they enter the digital asset market. For more on crypto custody and security, read our coverage of the Coldcard security investigation.
South Korea's Evolving Crypto Regulatory Framework
South Korea has been developing its cryptocurrency regulatory framework over the past several years. The country implemented the Specific Financial Information Act in 2021, which required VASPs to register with the Korea Financial Intelligence Unit and comply with anti-money laundering regulations. The framework has since been expanded with additional requirements for customer protection, market monitoring, and reporting.
New rules expected to take effect in the coming months will impose additional requirements on cryptocurrency businesses, including stricter standards for exchange security, enhanced disclosure requirements, and potentially limits on certain types of trading. BitGo's decision to secure VASP registration ahead of these new rules positions the company to operate under the updated framework without disruption.
What This Means for the Korean Crypto Market
BitGo Korea's VASP registration could signal a new phase in the development of Korea's crypto market, one characterized by the entry of specialized international service providers alongside domestic exchanges. While Korean exchanges like Upbit and Bithumb have dominated the local market, the entry of global custody providers could bring new competition and innovation to the market.
The registration also demonstrates that despite the regulatory challenges and recent revenue declines at Korean exchanges, international companies still see Korea as a market worth entering. The presence of regulated, specialized custody providers could help build institutional confidence in the Korean crypto market, potentially attracting more institutional capital to the sector. For more on global crypto business expansion, read our coverage of Visa's stablecoin expansion.
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