South Korea Tightens Crypto Oversight and Moves Ahead With Tokenized Bonds

South Korean regulators are intensifying supervision of the crypto sector. The Financial Supervisory Service urged major virtual‑asset service providers to strengthen internal controls, improve governance and avoid risky products, warning that enforcement alone cannot restore market confidence. The Financial Services Commission also referred two suspected market‑manipulation cases – involving a large‑scale “whale” pump‑and‑dump scheme and automated API trading – to prosecutors to protect retail investors.

At the same time, the Bank of Korea is expanding its blockchain‑based financial infrastructure through Project Hangang, which demonstrated a unified ledger for wholesale digital currency and tokenized deposits. Building on this pilot, the central bank is evaluating tokenized government bonds as the next step to improve settlement efficiency and monetary‑policy implementation.