TITLE: South Korea's Financial Supervisory Service Outlines 2026 Virtual Asset Supervision Strategy
BODY:
On March 4, 2026, the Financial Supervisory Service (FSS) Virtual Asset Supervision Division and Virtual Asset Investigation Division released its 2026 virtual asset supervision operational plan, addressing market conditions, regulatory environment, and supervisory priorities for the domestic virtual asset sector.
The domestic virtual asset market has experienced significant volatility since October 2025, with major cryptocurrency prices declining substantially following adverse developments originating from the United States. Bitcoin (BTC) fell approximately 46.4 percent from its historical peak of 178.1 million Korean won on October 8, 2025, to 96.68 million won by February 23, 2026. Alternative cryptocurrencies also experienced sharp declines, including Ethereum (ETH) down 58.1 percent, XRP down 52.0 percent, and Dogecoin down 62.9 percent. Despite market contraction, the number of domestic virtual asset users increased 11.0 percent to 10.77 million as of June 2025, compared to year-end 2024. The FSS reported 27 registered virtual asset operators as of February 2026, comprising five won-based operators, 13 coin operators, and nine wallet custodians, with 15 operators ceasing or suspending operations.
The FSS established a supervision vision centred on user protection and market trust. Key 2026 priorities include: establishing a new regulatory framework to support Phase Two legislation (the Digital Asset Basic Law); enhancing internal control systems; strengthening market and operator monitoring; conducting risk-focused inspections; implementing themed investigations into unfair trading practices; and enhancing exchange market surveillance capabilities. The FSS created a Digital Asset Basic Law Implementation Preparation Team within the Virtual Asset Supervision Division in January 2026 to support rapid legislative implementation and subordinate regulation development. The supervisory approach emphasises building a disciplined and trustworthy virtual asset ecosystem through improved market structure, enhanced industry communication, and rigorous enforcement against market manipulation and unfair trading practices.