South Korea Opens Crypto Trading to Non-Profits and Exchanges in June

South Korea plans to open its crypto market to non-profit organizations and exchanges starting in June. This move will boost corporate access and shield users from market risks.

According to an official report, South Korea’s Financial Services Commission (FSC) and Financial Intelligence Unit (FIU) will implement customer verification protocols for non-profit organizations and virtual asset exchanges in May.  

“We plan to establish customer verification measures for virtual asset transactions between non-profit corporations and exchanges in May,” and “We will also proceed without a hitch with the goal of announcing a plan to issue real-name accounts to listed corporations, and corporations registered as professional investors in the second half of the year,” the Financial Services Commission wrote.

South Korea’s Proposed Plan

The agencies also plan to issue real-name accounts to listed firms and certified professional investors as part of the second phase of the country’s virtual asset roadmap, with a formal rollout expected later this year.

As part of the latest development, the Virtual Asset Committee also agreed that the law should be changed quickly because tokenized securities (STOs) could help improve the capital market and offer more ways for people to invest.

The report noted that exchanges can sell virtual assets only if they are registered under the relevant financial law, and even then, they may only do so to pay for their operating costs.

Notably, sales are only allowed for the top 20 tokens by market capitalization on Korea’s five Won-based exchanges. Daily sales are kept under 10% of the planned total to limit market impact, and selling through your own exchange is prohibited.

South Korea Reduces Money Laundering

Per anti-money laundering measures, entities must implement internal control protocols, including the necessity for board-level authorization of virtual asset sales initiatives.

Furthermore, entities must comply with pre-transaction disclosure obligations and post-transaction reporting, encompassing sale outcomes and fund utilization details.

Before the country’s decision, the ‘listing beam’ effect, which causes significant price volatility due to temporary supply-demand mismatches when virtual assets are newly introduced to the market, had become a source of concern over potential user losses.

To mitigate the listing beam, the government now requires a minimum asset volume before trading starts and limits market orders shortly after launch. Remarkably, the initiative seeks to implement a basic safety buffer and improve transaction rules to handle problems like sudden listing spikes that destabilize the crypto market.