New Crypto Compliance Rules Ahead of Institutional Launch
South Korea is imposing stricter cryptocurrency regulations in preparation for welcoming institutional investors. With new exchange-traded funds (ETFs) on the horizon, the country is pushing for full compliance before the June 2025 deadline.
FSC Confirms Regulatory Framework for Nonprofits and Exchanges
The Financial Services Commission (FSC) has announced that new regulations will apply to non-profit organizations and registered crypto exchanges starting June 2025. These guidelines aim to boost transparency and ensure tighter control over crypto-related activities before broader institutional access is granted.
Donation Regulations for Nonprofits
Under the new law, nonprofits must meet several criteria to accept crypto donations:
- Five years of audited financial records are required.
- Donation Review Committees must be formed to evaluate and track crypto contributions.
- All crypto-related transactions must be conducted through verified Korean bank accounts.
Only tokens listed on at least three major domestic exchanges will qualify for donation purposes. Once received, donated cryptocurrencies must be immediately sold and converted into Korean won to reduce misuse.
Stricter Controls on Crypto Exchanges
For crypto exchanges, the new rules come with tighter boundaries:
- They may sell crypto received as user fees, but only for operational expenses.
- Daily sales limits apply, restricted to the top 20 tokens by market cap listed on five major South Korean platforms.
- Exchanges are banned from self-trading these tokens to prevent manipulation.
Token Listing Standards: Zombie Tokens and Memecoins Targeted
The FSC has also introduced token listing criteria:
- Tokens with low trading volume (referred to as “zombie tokens”) will be delisted.
- Memecoins without practical use cases or community engagement are under scrutiny.
- To stay listed, tokens must meet liquidity and community-building standards.
Real-Name Accounts and Institutional Access Timeline
Starting in June, nonprofits and exchanges will need real-name account registration. Institutional investors and listed firms are expected to follow later in the year as part of a phased regulatory rollout.
South Korea Signals Support for Digital Asset Innovation
With both leading presidential candidates backing a Bitcoin ETF and a Korean won stablecoin, the government’s attitude toward financial innovation is clear. South Korea’s policy shift is designed to protect investors while fostering a regulated yet dynamic digital asset ecosystem.
Final Thoughts: Transparency as the New Norm
As South Korea prepares for institutional participation in crypto markets, nonprofits, crypto exchanges, and future market entrants must adjust to the new era of regulation. These steps will shape a more secure and structured digital economy for the country.
