South Korea's Financial Services Commission (FSC) said it would look into letting cryptocurrency exchanges trade tokenized securities. At the same time, the FSC's anti-money-laundering arm defended a six-month penalty against Bithumb in court, and the central bank set out plans to widen cross-border balance reporting for digital asset holders.

FSC open to token securities on crypto exchange infrastructure

FSC Chairman Lee Eog-weon told a National Assembly Political Affairs Committee audit that he was open to the idea of allowing tokenized securities to be traded through crypto exchange infrastructure.

Rep. Lee Kang-il of the ruling Democratic Party argued that restricting certain types of exchanges from the market makes little sense when the same securities rules and investor-protection requirements apply across the board.

Lee said he would take factors such as market conditions and investor protection into consideration. He will also weigh whether licensing units should be merged and how concurrent operations might work.

The chairman pointed to the United States as a reference. In September, the U.S. Securities and Exchange Commission (SEC) announced an “Innovation Exemption” that lets qualifying on-chain platforms, crypto exchanges included, trade tokenized versions of some US-listed stocks. If Seoul followed a similar path, the licensing questions Lee flagged — merged units and concurrent operations — would decide whether a single platform could host both digital asset trading and tokenized securities trading.

Amendments to the Electronic Securities Act and the Capital Markets Act that put token securities on a legal footing take effect on February 4, 2027, as Cryptopolitan has reported. The FSC's subordinate rules would allow stocks, bonds, and funds to trade in tokenized form from that date.

Separately, Lee told a parliamentary hearing that consultations on the broader Digital Asset Basic Act are in their final stages.

Why Bithumb is challenging the FIU

The Financial Intelligence Unit (FIU), the FSC's anti-money-laundering department, went to court to defend its crackdown. Bithumb challenged the FIU's sanction, and the Seoul Administrative Court held its first oral argument on Thursday.

The FIU says Bithumb processed 45,772 transfers involving 18 unregistered overseas virtual asset providers between August 28, 2022, and April 3, 2025. The exchange was fined 36.8 billion won (about $24.5 million) and hit with a six-month partial business suspension that stopped new customers from moving their digital assets off the platform.

Bithumb's lawyers argued that the exchange did nothing wrong. For transfers of 1 million won (about $700) or more, they said, the travel rule automatically blocked sends to unregistered providers, so no violations occurred.

For smaller transfers, the exchange said it had no legal right to collect details about the receiving exchange, and that the FIU never made clear what blocking measures it expected.

Bithumb also pointed out that Chainalysis, the screening tool cited by regulators, is a private foreign company, and that it had no legal duty to use it. It added that only about 2 of the addresses it could not identify later turned out to belong to unregistered providers.

The company's arguments mirror those used in a case from April 2026, when the same court canceled the FIU's three-month suspension of Dunamu, the company behind Upbit, ruling that the rules for small transfers were not specific enough. That earlier outcome is the most directly comparable precedent Bithumb can point to: the same court, weighing the same small-transfer rules, ruled in an exchange's favor.

Bithumb will submit its written arguments by mid-December, and the next hearing is scheduled for January 28, 2027.

Bank of Korea to expand cross-border balance reporting

Starting December 2, any user of a domestic exchange who has ever sent digital assets to an overseas exchange or a private wallet will have their month-end holdings reported to the Bank of Korea's foreign exchange information network. This applies even in months when they made no transfers.

A reporting manual obtained by Rep. Park Soo-young of the People Power Party shows the central bank is creating a new filing called FX1021. It will include the amount of each asset held at month-end, its value converted to won, and the total amounts sent in and out.

Users are covered if they have moved digital assets abroad or to a private wallet at any time since July 19, 2024, the day the Virtual Asset User Protection Act took effect. Exchanges must file each report by 5:30 p.m. on the 10th of the following month.

The timeline moves quickly from here: the new filings begin December 2, Bithumb's next hearing falls on January 28, 2027, and token securities gain their legal footing on February 4, 2027.

Source: Cryptopolitan