Concerns about competition in South Korea's cryptocurrency market have prompted a review of the prevalent "one exchange–one bank" model, which connects each crypto exchange to a single banking partner. This examination is being conducted by the Financial Services Commission (FSC) and the Fair Trade Commission, as reported by the Herald Economy. The model, while not explicitly defined in legislation, has developed due to Anti-Money Laundering (AML) requirements and customer due diligence.
A recent government-commissioned study has indicated that this pairing of exchanges with banks may exacerbate market concentration, limiting access for smaller or newer exchanges. The research highlighted that the Korean won-based crypto market is dominated by a few major platforms, which can undermine liquidity and efficiency for less established players. The study suggested that applying uniform standards across exchanges with varying risk profiles could be excessively burdensome.
In addition to this review, South Korean regulators are also working on the Digital Asset Basic Act, a significant piece of legislation aimed at regulating the crypto sector. Lawmakers have postponed the bill's submission to 2026 due to ongoing debates over the oversight of domestic stablecoin issuers, adding another layer of complexity to the evolving regulatory landscape.