South Korea's Financial Services Commission (FSC) has announced plans to relax regulations on the sale of cryptocurrencies, allowing institutions such as charities, universities, and crypto exchanges to liquidate their digital assets in 2025.
This development comes after a growing demand from the institutional sector for increased involvement in the crypto market, signalling a shift in the country’s approach to digital asset trading.
As part of the new framework, the FSC will enable charitable organisations and universities to sell the cryptocurrency donations they have received.
This move is expected to be implemented in the second quarter of 2025, opening the door for these institutions to convert their digital assets into cash.
The policy aims to streamline processes for entities holding crypto assets, addressing concerns about their use for funding purposes.
The FSC's decision is seen as a response to the increasing interest in corporate participation within the crypto space.
The regulator has acknowledged that these moves are in line with broader global trends where major markets are easing restrictions on institutional crypto trading.
In addition to institutional investors, South Korean crypto exchanges will also be permitted to sell their crypto holdings.
These holdings, which are typically collected as transaction fees, will now be available for sale, allowing exchanges to cover essential operating costs like payroll and taxes.
However, the FSC has noted potential risks of conflicts of interest, which may arise from mass sales of crypto assets by exchanges.
To mitigate these concerns, the sale process will be gradually implemented, and a common set of guidelines will be established among operators.
The FSC's decision to allow institutions to engage in crypto transactions marks a significant policy shift.
The first step will involve a pilot program, which will begin in the first half of 2025.
This initiative will allow around 3,500 listed companies and registered professional investors to open "real-name" accounts for crypto trading.
The pilot is part of the regulator’s plan to assess the market and introduce real-time investment opportunities for institutional investors.
The FSC's announcement reflects an evolving stance on virtual assets in South Korea.
The country has historically maintained strict regulations on institutional crypto activity, especially since 2017, to prevent speculation and address concerns related to money laundering.
However, with the growing demand for blockchain-based services and crypto adoption, the regulator is gradually lifting these restrictions to better align with global trends.
Looking ahead, South Korea's crypto regulatory framework, which went into effect in July 2024, is set for expansion.
The FSC has already initiated discussions to create a follow-up regulation to address emerging issues in the market.
These changes aim to ensure that the country’s crypto market remains secure and resilient, with a focus on protecting investors while encouraging innovation.
South Korea’s role as one of the largest crypto markets in the world continues to grow.
Upbit, a prominent South Korean exchange, ranks as the fourth-largest centralised exchange by monthly volume globally, reinforcing the country’s strong position in the crypto industry.
The FSC's recent actions show how cryptocurrency regulations are shifting, not only in South Korea but globally as well.
As more countries open up to institutional crypto trading, South Korea’s regulatory steps reflect the growing recognition of the need for robust, flexible frameworks to support the expansion of blockchain technology and digital assets.
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