Google Play crypto policy shift tightens oversight on south korea crypto exchanges from January 28

Regulatory changes in South Korea are about to reshape how south korea crypto services reach users through Google Play, with foreign platforms facing stricter registration rules.

Google Play aligns with South Korean FIU rules

From January 28, Google Play will enforce updated policies in South Korea that require overseas virtual asset exchanges to complete formal registration with the country's Financial Intelligence Unit (FIU) to remain available in the local app market.

According to local outlet Korean News 1, industry officials revealed that Google notified developers about revisions to its rules affecting virtual asset exchanges and software wallets. The changes apply to all related apps distributed through Google Play to Korean users.

Only platforms that comply with domestic financial legislation and complete the FIU's virtual asset service provider authorization will be permitted to list new apps or roll out updates. Moreover, the policy effectively links app store availability to formal regulatory status.

New obligations for foreign crypto apps

Under the South Korean government's new framework agreed with Google, overseas exchanges seeking to operate via Google Play must complete what regulators describe as a "repair" of their virtual asset business report. This involves updating filings with the FIU to match current compliance expectations.

That process requires building an anti-money laundering framework and obtaining an Information Security Management System certification from the Korea Internet & Security Agency, a key information security certification Korea demands for financial and data-sensitive operators.

Economists cited in local reports believe the stricter expectations could push away several global platforms, including Binance and OKX, because they may struggle to meet every requirement before the deadline.

Past enforcement efforts and changing tactics

In March last year, South Korean authorities suspected 17 foreign platforms of violating the Special Financial Information Act. As a result, regulators asked app stores to block downloads and updates for those services.

However, users continued to access these exchanges through web browsers, since the Korea Communications Standards Commission delayed ordering website blocks. This gap left a path open for investors to bypass app store controls.

That said, the latest move shifts the focus directly to the app distribution channel. One government official told Mkr Korea that, unlike in the past when financial authorities requested telecom operators to restrict access, this time Google is implementing the block as a policy decision.

Impact on investors and developers

The official warned that domestic investors primarily active on overseas platforms may face "considerable inconvenience" when trying to move assets or cash out positions. This is especially relevant for users dependent on mobile applications for daily trading.

Another complication for developers is understanding whether simply submitting documents to the FIU would satisfy Google's criteria. In comments to News 1, Google clarified that the developer console used to register apps will require concrete proof that the business report repair has been completed.

Moreover, financial apps, including crypto trading platforms, rely on frequent updates to function properly. Without the ability to update via Google Play, trading tools, asset transfer functions, and essential security patches could suffer outages or degraded performance.

Regulators intensify scrutiny of domestic operators

Alongside tighter controls on foreign app distribution, South Korean financial authorities have increased inspections of domestic virtual asset operators. Officials are reviewing shareholder structures and conducting more on-site checks at local offices to assess governance and compliance.

Opponents of the government's handling of foreign businesses argue that this dual pressure makes passing the FIU's standards even tougher for overseas exchanges. They claim the fiu registration process, combined with extensive onshore due diligence, may deter some players from serving Korean customers.

Domestic exchanges are currently prohibited from offering virtual asset futures trading. As a result, many Korean investors turn to global platforms for derivatives exposure. However, if access to those platforms is restricted through app store controls, users could find it harder to manage leveraged positions or transfer funds quickly.

Industry backlash over shareholding limits

The tightening Google rules on apps arrive amid broader industry unease. South Korea's Digital Asset Exchange Alliance (DAXA) recently issued a public statement criticizing government discussions on limits on shareholder stakes in crypto trading venues.

The alliance represents the country's five largest platforms — Upbit, Bithumb, Korbit, Coinone, and Gopax. According to DAXA, the proposed caps could "significantly impede" growth in the digital asset market by discouraging long-term investment and strategic backing.

Moreover, the association argued that forcing changes to existing ownership structures risks weakening what they view as a core foundation of the sector: decentralization of control combined with accountable major shareholders.

Proposed ownership caps and competitiveness concerns

Earlier this month, the Financial Services Commission reportedly floated a proposal to limit stakes held by individual shareholders in exchanges to between 15% and 20%. However, critics believe applying such thresholds to already established companies could destabilize proven business models.

DAXA stressed that, unlike traditional securities, digital assets move across borders without restriction. The group warned that if investment in local platforms stagnates due to tighter ownership rules, South Korea could lose competitive ground, sending users to foreign crypto exchanges Korea still allows online.

The alliance also rejected the notion that merely dispersing ownership improves oversight. Instead, it claimed that large, committed stakeholders have both the incentive and responsibility to safeguard user assets and strengthen compliance frameworks.

Outlook for South Korean crypto regulation

Overall, the combination of stricter Google Play policies, heightened FIU expectations, and planned ownership limits signals a new phase for the south korea crypto market. Policymakers appear intent on tightening control over both domestic and foreign operators while industry participants warn of reduced competitiveness.

How exchanges adapt to these regulatory and distribution challenges over the coming months will determine whether Korean users retain broad access to global liquidity or shift toward a smaller pool of fully compliant platforms.