View on bitcoin: Not legal tender.
Policy on exchanges: Legal but use of anonymous bank accounts for virtual coin trading is prohibited. Need to register with South Korea's Financial Services Commission.
Trading in South Korea makes up about 4 percent of daily volume of bitcoin. For other cryptocurrency such as XRP, trading in the Korean won commands a premium to U.S. dollars. Asia's fourth largest economy has become a hub for trading but regulators have given mixed signals.
Financial authorities said in 2013 that bitcoin and other digital currencies are not legitimate currencies, according to the Korea Herald.
South Korea's justice minister said in January that the government was considering a shutdown of cryptocurrency exchanges. A petition asking the government to hold back on "unreasonable" regulation got 280,000 signatures following the announcement. The government responded by saying it will take firm action against illegal and unfair acts in cryptocurrency trading.
Last year, the Financial Services Commission banned local finance firms from trading bitcoin futures, according to local publication Business Korea. The commission also banned the use of anonymous bank accounts for virtual coin trading in January but said it doesn't intend to completely shut down domestic exchanges.
The government has said that while it will not ban bitcoin exchanges, initial coin offerings and futures will remain under scrutiny.
In late February, a government official said South Korea had still not decided how to regulate.
"The government hasn't made any conclusion yet. Sufficient consultations should come first," Hong Nam-ki, minister of office for government policy coordination, told parliament.