South Korea crypto disclosure requirements to plug DART gap
South Korea is advancing a second-phase regulatory plan that would impose capital-market-level crypto disclosure requirements on major exchanges and qualifying digital-asset projects. The centrepiece is integrating mandatory reporting into DART (South Korea’s electronic disclosure system run by the Financial Supervisory Service), replacing today’s more limited and partially voluntary disclosures.
The draft follows research commissioned by the Financial Services Commission (FSC) from Seoul National University’s Center for Financial Law. The study argues that disclosure gaps are a key vulnerability in the current framework and that self-regulation alone is structurally weak.
Key proposals include: mandatory DART filings (standardized formats and legal enforceability), three new licensed business categories—Virtual Asset Evaluation Services, Virtual Asset Advisory Services, and Virtual Asset Disclosure Services—and extending consumer-protection rules comparable to the Financial Consumer Protection Act (liability clarity, dispute resolution, suitability requirements, and tighter advertising/marketing controls).
Regulators would keep DAXA’s role but strengthen government oversight. The report highlights conflicts of interest within DAXA, formed by major exchanges (Upbit, Bithumb, Coinone, Korbit, Gopax). The plan does not include ownership shareholding limits for large exchange owners.
Industry preparation is already underway, with exchanges reportedly upgrading compliance teams and disclosure systems ahead of potential DART integration. The legislative process could take several months, with committee review, public hearings, revisions, and final approvals.
Neutral
Neutral because the plan is likely to reduce disclosure and investor-protection risk over time, which can support institutional confidence, but it also increases compliance costs and may constrain smaller market participants.
In the short term, markets often react to regulatory “framework upgrades” with volatility: traders may front-run headlines about mandatory DART reporting timelines and what qualifies as a “licensed” service. Similar episodes—when jurisdictions move from lighter-touch rules to formal reporting/licensing regimes—tend to cause uncertainty-driven swings before clearer implementation details emerge.
In the long run, aligning crypto disclosure with capital-market standards can improve data quality and enforceability (helpful for risk modeling, audits, and custody/transaction reporting). However, because the proposal keeps the ownership structure unchanged and focuses on transparency rather than structural changes, the immediate impact on liquidity and market structure may be limited, leading to a balanced overall effect.