South Korea’s financial regulator plans to allow select institutions to sell cryptocurrencies received as donations by the first half of 2025.
Presiding over the 3rd Virtual Asset Committee meeting on February 13, Kim So-young, Vice Chairwoman of South Korea’s Financial Services Commission, reviewed and finalised a series of regulatory updates, including plans to ease restrictions on crypto transactions for certain entities, as part of a broader effort to refine the country’s digital asset framework.
A phased approach
During the first half of the year, the FSC will allow law enforcement agencies, including the prosecution, National Tax Service, and Customs Service, to open real-name accounts for selling purposes, a process that has already been in place since the end of last year.
In the second quarter, this policy will extend to designated nonprofit organisations such as universities and other charitable institutions “that ensure transparency in fundraising and utilisation and are managed and supervised by the competent authorities.”
Since many nonprofits still lack clear guidelines on handling and cashing out crypto, the FSC plans to work with relevant institutions to set basic internal control standards to help them navigate the process.
Meanwhile, cryptocurrency exchanges will be allowed to sell digital assets received as fees.
However, to prevent conflicts of interest and protect users, the FSC plans to introduce a joint industry-wide “sale guideline” that ensures large sell-offs do not negatively impact the market.
The second half of the year will be geared towards a pilot program that will allow select institutional investors to open real-name accounts for investment and financial purposes.
Previously, Invezz reported that such plans were rumoured, but at the time, the FSC dismissed those claims, maintaining that institutions were not permitted to engage in cryptocurrency transactions.
Now, the FSC is moving forward with a pilot program, which will grant around 3,500 corporations and professional investors controlled access to crypto transactions.
These entities, which already meet South Korea’s Capital Markets Act criteria for high-risk investments, will be allowed to open accounts and, under certain conditions, buy and sell digital assets.
To support these changes, the FSC plans to strengthen trading guidelines for cryptocurrency exchanges, focusing on stricter listing criteria, enhanced disclosure requirements, and safeguards against market manipulation.
Plus, the FSC is forming a task force with related organisations like the Financial Supervisory Service, the Korea Federation of Banks, and DAXA to finalize internal control standards and trading guidelines.
South Korea’s focus on crypto
Last month, FSC Chairman Kim disclosed that the country was moving ahead with the next phase of crypto regulations to keep up with global trends.
One of the areas the country has focused on is digital currency taxation.
South Korea has delayed the implementation of its 20% tax on crypto gains exceeding 2.5 million won (around $1,800), along with an additional 2% local income tax, pushing the policy’s enforcement to 2027.
At the same time, the country has stepped up efforts to combat tax evasion involving cryptocurrencies.
On February 4, South Korea’s Gwacheon City introduced an electronic virtual asset seizure system designed to track and confiscate crypto holdings linked to tax offenders.
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