South Korea tightens access to cryptocurrency as Google Play blocks unregistered exchanges

South Korea is tightening its grip on how crypto platforms reach users and using app stores as an enforcement tool, as regulators tighten the line between compliant digital finance and unregistered crypto activity.

The country has established advanced legislation that establishes a legal framework for offering security tokens, creating a regulated pathway blockchain-based issuance and trading of tokenized securities.

The National Assembly on Thursday passed amendments to the Capital Markets Act and the Electronic Securities Act, institutionalizing tokenized securities for debt, equity and investment contract products.

The framework defines security token offerings as securities under the Capital Markets Act “whose issuance and distribution information is recorded and managed on a blockchain-based distributed ledger,” reads a rough translation of the statement.

Implementation will be led by the Financial Services Commission and the laws will come into force in January 2027, after a one-year preparation period.

These definitions would “enable distributed ledger-based securities, account management, and greater use of smart contracts,” the Financial Services Commission wrote. The new infrastructure could also help “strengthen the use of smart contracts” and is “expected to become more active.”

Preventive enforcement?

The regulatory push for tokenized finance is accompanied by stricter enforcement at the distribution level.

Google Play, the leading app marketplace for Android devices, has introduced new restrictions affecting crypto apps in the country. According to the updated policy, crypto exchanges and wallet providers must register as virtual asset service providers with South Korea’s Financial Intelligence Unit to remain listed on the Play Store.

Starting January 28, Android users in South Korea will no longer be able to download or update apps from unregistered foreign exchanges.

Only 27 domestic platforms, including Upbit and Bithumb, have completed FIU registration, while major global exchanges such as Binance, Bybit and OKX remain unregistered, effectively blocking their apps from new installs and updates on the local Google Play marketplace.

The restriction effectively cuts off an important distribution channel for platforms that have continued to serve Korean users without local permission.

“As an enforcement tool, the impact is significant,” Siwon Huh, a researcher at South Korean crypto research firm Four Pillars, told me. Declutter.

Android users “will account for more than 80%” of the South Korean market by the third quarter of 2025, Huh noted.

“Solutions such as web browser trading or APK sideloading exist, but these are not realistic alternatives for security-sensitive financial applications,” he said. “For the majority of ordinary users, the ban will have a practical blocking effect.”

However, Huh noted that Google’s move appears to be isolated from the government’s, and instead stemmed from “Google’s update to its cryptocurrency app policy.”

“The main criterion was whether exchanges have VASP registration in each country. Since most foreign exchanges have not obtained Korean VASP licenses, this led to their removal,” he explained, adding that domestic media reports indicate that regulators “only started to assess the situation after Google’s action.”

This could mean that Google “preemptively enforces regulations in line with Korea’s broader regulatory direction, rather than acting completely outside of it,” Huh said.

“There is also a possibility that the Korean government will use this opportunity to impose broader restrictions, including blocking foreign exchange access through the Apple App Store and web browsers, and possibly expanding sanctions against DEXs,” he warned. “In the long term, it seems clear that this will create a divide between regulated sectors and risky crypto markets.”

To date, the country still bans crypto futures markets. Bitcoin kept at exchanges can now be legally seized.