- FSC probes crypto exchange fees to lower trading costs.
- President Lee pushes for affordable crypto trading access.
- Probe compares local fees to global standards for fairness.
South Korea, The Financial Services Commission (FSC) has launched an investigation looking at the transaction fees imposed by domestic cryptocurrency exchanges. The research focuses on determining whether there is a need to reduce the fee to reduce the trading cost to the user. The decision is in line with the campaign vow of President Lee Jae-myung to make crypto trading to become more cost-effective.
An investigation of the fees charged by major cryptocurrency exchanges, including Upbit, Bithumb, and Coinone, will be conducted by the FSC. The government intends to contrast the local prices against international prices to ensure fairness. The investigation is triggered by an outcry over the prohibitively high cost of transactions, which affects the youthful investor, a major force in the South Korean crypto industry.
President’s Pro-Crypto Push Drives Reform
The new president of South Korea, Lee Jae-myung, has placed an emphasis on crypto-friendly policies. In his campaign, he had promised to lower trading fees in order to increase accessibility. The transaction costs will be reduced, which will make the digital assets more inclusive to everyone, but the economic growth is mentioned as the key priority, according to Lee.
The probe is part of larger attempts to control and increase the crypto industry in South Korea. It is also looking at the on-chain stablecoin and the spot Bitcoin ETF. These have been an effort to reduce outflow of capital and to boost the local market, which experienced outflow of 56.8 trillion won in assets earlier this year.
Regulatory Context and Market Impact
South Korea has a robust crypto regulatory framework. Since July 2024, the Virtual Asset User Protection Act has come into force and introduces harsh rules on exchanges. A recent crackdown method is the investigation of KYC breaches of Upbit and punishing non-compliant websites.
The fee investigation could reshape the market. Reduced charges can draw in more retail investors, resulting in increased trading volumes. Nonetheless, more regulation has strained the finances of exchanges such as Upbit, which bore 272 million won of supervisory fees last year.
International exchanges, like Binance, are lower-fee, offering a precedent to the FSC. The investigation can compel local platforms to have competitive prices. This would be advantageous to users, but would be problematic to smaller exchanges that are unable to meet regulation requirements.
South Korean crypto traders have been deterred by high fees. The investigation by the FSC will deal with this, but this may be a difficult challenge to implement. Exchanges should be able to maintain profitability as well as compliance with the supervision of the Virtual Asset User Protection Act.
The inquiry can also affect the perception of the South Korean crypto market in the world. The country is one of the biggest centers of digital assets in Asia, and its reforms may become an example. As an example, policy changes in South Korea have been prompted by the changing ETF regulations in Japan.
