South Korea’s New Crypto Rules: What Nonprofits and Exchanges Must Know
Starting June 2025, South Korea enforces strict KYC rules for nonprofits and crypto exchanges to enhance transparency and combat money laundering.
Beginning in June 2025, South Korea’s Financial Services Commission (FSC) will implement stringent Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations targeting nonprofit organizations and cryptocurrency exchanges. These measures aim to bolster transparency and mitigate financial crimes within the digital asset sector.
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Nonprofit Organizations:
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Must have a minimum of five years of audited financial history.
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Required to establish internal Donation Review Committees to assess and approve crypto donations.
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Permitted to accept only cryptocurrencies listed on at least three Korean won-based exchanges.
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Mandated to liquidate received crypto assets immediately upon receipt.
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Cryptocurrency Exchanges:
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Allowed to sell crypto assets obtained from user fees solely to raise operational capital.
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Subject to daily sale limits and prohibited from selling through their own platforms to prevent conflicts of interest.
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Restricted to selling only the top 20 cryptocurrencies by market capitalization traded on major Korean exchanges.
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Obligated to disclose sale results and the utilization of proceeds transparently.
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Enhanced Compliance Measures:
To combat money laundering, the FSC mandates that exchanges and banks intensify their KYC procedures for new institutional clients. This includes thorough verification of fund sources and transaction purposes. Additionally, the FSC will monitor institutional activities and their executives for potential money laundering activities.
Implications for Investors:
These regulations are expected to foster a more secure and transparent crypto market in South Korea, potentially attracting institutional investors. However, the increased compliance requirements may also lead to higher operational costs for exchanges and nonprofits.
