The South Korean Financial Services Commission (FSC) will mandate non-profit organizations and cryptocurrency exchanges to comply with a strict customer verification process from June.
In an official release, the country’s top financial regulator announced that these entities will be allowed to sell digital assets under the new regulations.
Non-profits are allowed to sell cryptos that they receive through donations and sponsorships, the release noted. Meanwhile, exchanges can liquidate user fees paid in cryptos.
The move arrives at a time when South Korea is reviewing a plan to “gradually allow corporations” to buy, sell, and hold cryptoassets. The country said early this year that it is also lifting the ban on local institutions trading cryptocurrencies.
Customer Verification to Mitigate Money Laundering: FSC
The regulator further said that the KYC measures would protect the South Korean financial market from risks, including money laundering.
As a result, for “proper use of donated virtual assets,” non-profit corporations are limited to cryptos supported for trading on three or more Won exchanges. For digital asset exchanges, cryptos subject to sale are limited to the top 20 in terms of marketcap on the five KRW exchanges.
To prevent money laundering, the FSC has strengthened the verification of transaction purposes and sources of funds for non-profits. Additionally, it only allows donations through domestic won exchange accounts.
For exchanges, “internal control procedures such as board of directors’ resolution on virtual asset sales plans and prior disclosure obligations are also stipulated,” the financial watchdog added.
Revised Transaction Support Standards for Memecoins
The FSC has additionally laid out the revised transaction support best practices for listing zombie coins, and meme coins, “that cause instability in the virtual asset market.”
For memecoins, transaction support is only allowed when the number of cumulative transactions exceeds a certain amount, the release read.
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