South Korea’s financial landscape is set to witness a significant shift in June 2025. The Financial Services Commission (FSC), the nation’s principal financial regulator, has announced new regulations allowing non-profit organizations and virtual asset exchanges to sell their cryptocurrency holdings. The move marks a pivotal juncture in South Korea’s handling of digital currencies, aimed at enhancing oversight while offering entities a degree of operational leeway.
New Horizons for Non-Profits and Exchanges
Under the freshly minted guidelines, non-profit organizations will be permitted to engage in crypto transactions, albeit under stringent conditions. These entities must demonstrate at least five years of audited operations and establish internal committees tasked with vetting donations. Moreover, any accepted cryptocurrency must be listed on a minimum of three Korean won-based exchanges, and it’s generally expected that these tokens be sold immediately upon receipt.
Virtual asset exchanges, on the other hand, will find themselves navigating a complex landscape. While they are now allowed to sell cryptocurrency to bolster operating capital, they will face daily sales caps and are prohibited from conducting sales on their own platforms. The framework is designed to allow only the top 20 coins by market capitalization, traded on major Korean exchanges, to qualify for such sales. These transactions will adhere to the rigorous anti-money laundering standards that apply to all virtual asset service providers.
Tighter Controls and Market Implications
The FSC’s decision to lift the 2017 ban on corporate and banking crypto trading — initially imposed to curb “overheated speculation” — reflects a cautious yet progressive approach. This regulatory shift is poised to reshape the market dynamics, particularly as the FSC also tightens listing standards for local crypto exchanges. These platforms are now compelled to weed out “zombie” coins, characterized by low trading volumes or minimal market capitalizations, and impose stricter criteria on the listing of memecoins. The objective? To mitigate sudden price surges and bolster investor protection. This aligns with a broader trend in the industry, as noted in ‘Huge Shift’ in crypto firms’ compliance mindset, highlighting a growing emphasis on regulatory adherence.
According to Kim Ji-hoon, a financial analyst specializing in digital assets, “This regulatory overhaul is a double-edged sword. While it promotes transparency and protects investors, it may also stifle smaller projects that struggle to meet these new thresholds.”
The updated listing criteria and the broader framework will be enacted in June 2025, with the FSC indicating plans to extend these rules to corporations and institutional investors later this year.
Historical Context and Future Outlook
This development is part of a larger narrative in South Korea’s evolving crypto regulation landscape. The initial restriction on corporate crypto trading in 2017 was a knee-jerk reaction to rampant speculation, reminiscent of the infamous ICO frenzy. Yet, as digital assets have matured, so too has the regulatory approach, shifting from prohibition to structured oversight. This mirrors discussions in other regions, such as the UK, where the FCA Seeks Public and Industry Views on Crypto Regulation, indicating a global movement towards more comprehensive regulatory frameworks.
Despite these regulatory strides, uncertainties linger. Will the stringent conditions curb the enthusiasm of non-profits eager to embrace digital donations? And how will smaller exchanges adapt to the heightened listing standards without stifling innovation?
As the world watches South Korea’s experiment with cautious optimism, the broader implications for the global crypto market remain to be seen. The FSC’s move could serve as a blueprint for other nations grappling with the dual challenge of fostering innovation while safeguarding investors.
In the months ahead, as non-profits and exchanges navigate this new regulatory terrain, the cryptocurrency community will be keenly observing South Korea’s approach — a balancing act between regulation and innovation, between oversight and opportunity. And as the FSC prepares to expand these rules to larger corporate players, the stakes will only grow higher.
Source
This article is based on: South Korea to Let Non-Profits, Exchanges Sell Crypto Under New FSC Rules
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
