South Korea’s top financial regulator has created new crypto rules to tighten control as the country prepares to let big investors join the market.
The Financial Services Commission (FSC) shared the final changes during its fourth Virtual Asset Committee meeting on May 20. The new rules will start in June 2025 and aim to make the market safer and more organized for institutional investors in South Korea’s fast-growing crypto space.
FSC sets strict rules for nonprofits and exchanges to reduce crypto risks
The FSC in South Korea has introduced strict rules for nonprofits and crypto exchanges designed to reduce risks, prevent abuse, and create a safer environment as the country prepares to let institutional investors into the crypto market.
The new guidelines dictate that nonprofit organizations will only be allowed to trade crypto donations if they can prove that they have at least five years of audited financial records and form internal Donation Review Committees that will decide whether the donation is appropriate, whether it should be accepted, and how it will be converted into cash.
The new laws also require every transaction to pass through a registered financial channel where banks, crypto exchanges, and nonprofits will share the responsibility for verifying the legitimacy of each donation to ensure accountability and reduce the risk of illegal activities like money laundering.
Similarly, nonprofits can only accept cryptocurrencies listed on at least three major domestic exchanges to filter out risky or unverified tokens and ensure the donation process involves trusted coins.
Finally, nonprofits must convert the tokens into Korean won as soon as they get them, so they don’t hold or speculate with donated crypto.
These new rules also restrict exchanges to only selling crypto to cover their expenses and limit their daily sales to no more than 10% of the total amount they planned to sell so they don’t profit off digital assets collected through transaction fees and prevent large, unexpected sell-offs that could affect the market.
Another way these new guidelines reduce volatility and prevent platforms from using lesser-known or unstable coins is by allowing only the top 20 cryptocurrencies by market capitalization alone, listed across five different Korean won-based exchanges, to be eligible for these types of sales.
New listing standards and real-name accounts prepare the market for institutional access
South Korea’s Financial Services Commission also plans to create a safer, more reliable space where institutional investors can participate confidently by introducing tougher listing standards for cryptocurrencies and expanding access to real-name verified accounts.
The new rules state that cryptocurrencies must have a minimum circulating supply before being listed on an exchange to ensure exchanges trade only stable and useful tokens.
The FSC will also temporarily restrict market orders once an exchange platform lists a token to prevent traders from making large purchases or sales in the early hours or days of trading, causing sudden spikes or crashes.
Furthermore, the agency is also scrutinizing “zombie tokens” because they barely trade, have very low market volume, or are just sitting idle. Meme coins are not left out either because they lack clear real-world use.
In short, a coin will be delisted if it doesn’t have enough trading activity or if its users lose interest to avoid putting investors at risk.
At the same time, the FSC is rolling out real-name verified accounts to make the crypto industry in Korea more transparent and compliant with financial regulations by linking each crypto transaction to a verified identity and making it harder for bad actors to hide behind anonymous wallets.
Nonprofits and crypto exchanges can apply for these verified accounts starting in June. The FSC also plans to extend these real-name accounts to listed companies and professional investors to allow larger firms and experienced financial players to enter the crypto market legally and safely.
The country’s political leaders, like Democratic Party leader Lee Jae-myung and his political rival Kim Moon-soo, from the ruling People Power Party, are also pushing forward with big ideas to support crypto innovation and protect the country’s financial independence.
Lee Jae-Myung proposed launching a stablecoin backed by the Korean won that would act as a digital version of the country’s national currency and could help stop capital from flowing out of the country by giving people a local, stable digital asset to use instead of relying on U.S.-backed coins like USDT or USDC.
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