Fee reform incoming? South Korea probes how much exchanges actually charge

The authorities in South Korea are launching a formal probe into crypto exchange transaction fees as part of President Lee Jae-myung’s push to reduce trading costs for local investors. Local reports claim that the South Korean Financial Services Commission (FSC) announced the move during a policy briefing to the Presidential Transition Committee. The probe will reportedly focus on fee structures imposed by major domestic exchanges such as Upbit, Bithumb, and Coinone, marking the first policy-driven action to fulfill President Lee’s campaign pledge to support young and retail cryptocurrency traders. What does this mean for South Korean crypto traders? According to the FSC, the investigation will assess whether current transaction fees pose an excessive burden on users and whether they are reasonable compared to global benchmarks. The regulator also plans to examine how fees are collected, the transparency of disclosures, and the total revenue generated from trading commissions. No specific target rate has been proposed, but the agency said it would base future policies on user impact assessments and international comparisons. The FSC will conduct a formal survey of registered virtual asset service providers to collect data around how transaction fees are structured, charged, and communicated. Authorities have framed the move as a necessary step towards creating a more open economy that also strengthens safeguards for retail participants in a quickly growing crypto market. This initiative comes months after the FSC imposed a 0.6% supervision fee on crypto exchanges’ operating revenue, citing the need to fund oversight activities. Industry estimates suggest this could amount to 8 billion won ($5.8 million) annually, with larger exchanges like Upbit’s parent company, Dunamu, reportedly generating 986.2 billion won ($714 million) in 2023 operating revenue. Offshore exchanges under scrutiny The investigation also follows a wave of enforcement actions targeting exchanges operating without proper registration. In recent months, the Financial Intelligence Unit (FIU) has scrutinized platforms such as BitMEX, KuCoin, and CoinW for allegedly providing services to Korean users without meeting VASP registration requirements under the Specified Financial Information Act. These platforms risk criminal charges and ISP-level access blocks. Upbit, the country’s largest exchange, was suspended for three months earlier this year after failing to meet identity verification standards and processing tens of thousands of transactions involving unregistered entities. Authorities also raided Bithumb’s offices following allegations of embezzlement by a former executive. President Lee Jae-myung delivers on campaign promises Digital asset reform has emerged as a top priority for President Lee Jae-myung’s administration, with the fee probe marking an early step in that agenda. After winning a snap election on June 3 , Lee outlined a pro-crypto agenda that includes slashing trading fees, approving spot Bitcoin ETFs, and overhauling crypto banking rules. His campaign found support among younger, tech-savvy voters, and his administration has moved quickly to follow through on its promises. One of the first major legislative steps under the new administration came earlier this month when the ruling Democratic Party submitted the Digital Asset Basic Act , an ambitious proposal to establish South Korea’s first unified legal framework for cryptocurrencies, stablecoins, and virtual asset service providers. Among its key provisions are licensing standards for stablecoins pegged to the Korean won, compulsory reporting obligations for all digital asset activity, and the formation of regulatory bodies to oversee token listings and trading practices. To guide broader reform, it also includes plans for a presidential committee dedicated to shaping blockchain policy and modernising financial infrastructure. The post Fee reform incoming? South Korea probes how much exchanges actually charge appeared first on Invezz

Source: Invezz