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

The country has advanced legislation establishing a legal framework for security token offerings, creating a regulated pathway for blockchain-based issuance and trading of tokenized securities.

The National Assembly passed amendments to the Capital Markets Act and the Electronic Securities Act on Thursday, institutionalizing tokenized securities across 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,” a rough translation of the statement reads.

Implementation will be led by the Financial Services Commission and the laws set to take effect in January 2027 following a one-year preparation period.

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

Pre-emptive enforcement?

The regulatory push on tokenized finance runs alongside tighter enforcement at the distribution level.

Google Play, the primary app marketplace for Android devices, has implemented new restrictions affecting crypto apps in the country. Under 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.

Beginning January 28, Android users in South Korea will no longer be able to download or update apps from unregistered overseas 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, leaving their apps effectively blocked from new installs and updates in the local Google Play marketplace.

The restriction effectively cuts off a major distribution channel for platforms that have continued to serve Korean users without local authorization.

“As an enforcement tool, the impact is substantial,” Siwon Huh, researcher at South Korean crypto research firm Four Pillars, told Decrypt.

Android users “account for over 80%” of the South Korean market as of Q3 2025, Huh noted.

“Workarounds 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.”

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

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

This could mean that Google “pre-emptively enforced regulation in line with Korea’s broader regulatory direction, rather than acting entirely outside of it,” Huh said.

“There is also a possibility that the Korean government may seize this opportunity to push for broader restrictions, including blocking overseas exchange access through the Apple App Store and web browsers, and potentially extending sanctions to perp DEXs,” he warned. “In the long term, it seems clear that this will drive a separation between regulated sectors and high-risk crypto markets.”

To date, the country still prohibits crypto futures markets. Bitcoin held on exchanges, meanwhile, can be legally seized.