South Korea’s Financial Intelligence Unit (FIU) is now slowing down the expansion of the virtual asset market with fewer approvals and longer approval times.
Only two virtual asset service providers (VASPs) were approved in 2025, down from four in 2024. South Korea’s Financial Intelligence Unit has also increased approval times from 11 months to 16 months.
South Korea’s FIU is delaying approval for VASPs
South Korea’s Financial Intelligence Unit (FIU) approved only two new virtual asset service providers (VASPs) for the entire year of 2025. Happy Block received approval in January for exchange and trading operations, while Blosafe was approved in August for transfer and storage management services.
The average period from application submission to approval increased from 11 months in 2024 to 16 months in 2025.
Blosafe’s application took over 600 days to get approved. Industry sources indicate that numerous virtual assets are unable to launch their operations due to these extended delays.
Bit Korea, a joint venture with Hana Bank established in 2024, submitted its application to South Korea’s FIU, but so far, the company has not received approval and cannot conduct business. Under South Korea’s regulatory structure, companies can register as virtual asset operators but cannot operate without receiving approval.
On December 23, a year and four months past the deadline, the FIU approved the license renewal for Dunamu, which operates Upbit, South Korea’s largest cryptocurrency exchange. The FIU imposed a 35.2 billion won fine on Dunamu in November 2025 for violations, including negligence in anti-money laundering obligations.
Korbit submitted its renewal application in September 2025, while Bithumb, Coinone, and Gopax filed in October. On December 31, Korbit received notification of an institutional warning and a 2.73 billion won fine for regulatory violations.
Are suspicious crypto transactions surging in South Korea?
Between January and August 2025, virtual asset service providers filed 36,684 suspicious transaction reports with the Financial Intelligence Unit, already exceeding the combined totals of 16,076 reports in 2023 and 19,658 reports in 2024.
The Korea Customs Service reported that from 2021 through August 2025, about 9.56 trillion won was involved in cryptocurrency-linked crimes.
Approximately 90% of these cases involved hwanchigi schemes, which are illegal foreign remittance operations where criminal proceeds are converted into cryptocurrency through overseas exchanges, routed into domestic platforms, and cashed out in Korean won.
As Cryptopolitan reported, South Korea announced plans in November 2025 to expand its Travel Rule requirements to cover all transaction sizes, eliminating previous exemptions for transfers under 1 million won.
Hana Financial Group Chairman Ham Young-joo said that stablecoins should be considered a strategic priority in his January 3 New Year’s message and stressed the need to build comprehensive systems for stablecoin issuance and distribution.
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Source: https://www.cryptopolitan.com/south-korea-approved-two-vasps-2025/
