The Digital Asset Basic Law is about to be implemented. What is the future of my assets?

Changing Regulatory Environment: A Turning Point in the Korean Cryptocurrency Market

Following the implementation of the Virtual Asset User Protection Act in 2024 and the full activation of the Digital Asset Basic Act, the Korean cryptocurrency market has entered a new phase. This is not just a policy change but a fundamental shift that is transforming how investors manage their assets.

Since the enforcement of the Specific Financial Information Act in 2021, the domestic exchange landscape has changed dramatically. Over 60 exchanges have been rapidly consolidated due to failure to meet three requirements: real-name accounts, VASP registration, and ISMS certification. Many small and medium-sized exchanges failed to secure real-name account contracts with banks and, as a result, exited the market.

The current situation is becoming even more severe. The movement to “large-scale cleanup of non-compliant tokens” surrounding major domestic exchanges is accelerating, especially with the delisting risks faced by standalone listed tokens. In fact, nearly half of the coins listed independently since 2018 have already been delisted.

The Triple Risks Faced by Investors

First: Fear of Delisting

Low-liquidity “Kimchi coins” that are listed on only one platform are being targeted for cleanup. In a structure where listing reviews are left to autonomous decisions, the responsibility for delisting is entirely shifted to investors.

Second: Withdrawal Restrictions and Transfer Blocks

The scope of the Travel Rule continues to expand. Now, transferring assets under 1 million won to personal wallets requires prior address registration and additional verification. Withdrawals to addresses of overseas exchanges classified as unregistered VASPs are blocked regardless of the amount.

Third: Asset Freezing Trauma

When exchanges become subjects of investigation, as in the cases of Mt. Gox, FTX, and V Global, user assets are frozen for long periods. During legal proceedings, investors are repeatedly unable to do anything.

Limitations of Holding Physical Assets

By 2026, holding physical assets in the cryptocurrency market will no longer be just an investment option. It becomes a risky choice, as investors must bear hacking risks, exchange risks, delisting possibilities, and withdrawal restrictions all at once.

Even if coin prices rise, profits are not realized unless listing is maintained or withdrawals are possible. Conversely, if prices fall, the only response is extremely limited. The only option left is to “endure.”

Why a Shift in Trading Methods Is Necessary

The reason to shift from holding physical assets to trading is clear. If the investment goal is to profit from price fluctuations rather than asset ownership, there is no need to hold coins directly.

Here, the focus is on CFD( (Contract for Difference) trading. CFDs are derivatives that involve contracts based on the price movements of specific assets, without actually owning Bitcoin or altcoins. There are no on-chain transfers, and managing personal wallets or private keys is unnecessary. It is purely a price speculation on whether the price will go up or down.

Five Reasons Why CFD Trading Is Favorable in a Regulatory Environment

) 1. Avoidance of On-Chain Regulatory Risks While spot trading must pass Travel Rule, wallet verification, and VASP requirements, CFDs do not involve on-chain transfers. No personal wallets are needed, and funds move through fiat currency-based accounts. Since it does not involve the core target of regulation—“virtual asset transfers”—it is free from withdrawal blocks or wallet registration issues.

2. Opportunities Even in a Bear Market

When adverse events due to increased regulation occur, spot investors have limited options. They must endure severe price volatility or realize losses. However, with CFDs, short-selling options are available. Price declines become a trading strategy rather than a risk.

3. Stability Through International Regulatory Standards

Domestic exchanges are under a single regulation by Korean financial authorities, and policy changes can rapidly alter the business environment. In contrast, exchanges regulated by international authorities follow clear international standards. Customer funds are stored in trust accounts separate from company operating funds, so even if platform issues arise, customer assets are protected independently.

4. Price Transparency and Liquidity

In domestic exchanges, low-volume tokens often experience price distortions, and trading can be halted due to system checks. International CFD exchanges, however, are connected to global liquidity pools, so prices are not driven solely by a single exchange’s supply and demand. They offer deep liquidity and relatively stable price formation.

5. Limiting Losses

Korean investors fear losses more than the losses themselves—especially those caused by leverage trading. CFD exchanges compliant with international standards typically offer basic stop-loss features, and many provide negative balance protection. The structure prevents losses from exceeding the account balance.

Reconsideration of Investment Strategies in the Regulatory Era

The explosive growth of the cryptocurrency market in 2017 is gradually integrating into the formal financial system. The old investment mantra—“as long as it’s listed, value will rise, and holding through ups and downs will eventually recover”—is no longer valid.

Regulation has become a structural element, not just a temporary variable, and this structure is changing the very way trading is conducted. In the Korean cryptocurrency market, risks are no longer limited to price volatility. Investors must also consider delisting, withdrawal restrictions, wallet transfer blocks due to the Travel Rule, and exchange risks.

Under these conditions, holding physical assets increasingly involves uncertainty. Conversely, trading methods designed with regulation in mind can offer new options.

CFD trading is not suitable for all investors. However, if your goal is price arbitrage, you want tools to respond to volatility, and you aim to minimize regulatory risks, it is a viable alternative worth considering. Short-selling and risk management tools can turn volatility from a threat into a strategic advantage.

The most important factor is timing. Understanding and preparing for the regulatory structure in advance is far more rational than regretting it later. What is needed to survive in the market now is not blind optimism but the ability to adapt quickly to the environment.