- New rules for nonprofits and exchanges, focus on market entry.
- Stricter KYC and AML requirements implemented.
- Institutional investor preparation amid market adjustments.
The FSC’s guidelines aim to legitimize and regulate South Korea’s crypto markets ahead of institutional investor entry.
The guidelines mandate that nonprofits have five years of audited records and form Donation Review Committees. Exchanges are limited to selling assets for operating expenses only.
The immediate effect includes enhanced scrutiny for KYC and AML procedures, impacting banks and exchanges. “Our new guidelines aim to create a balance between regulatory oversight and the need for flexibility in the rapidly evolving cryptocurrency market.” – Lee Bok-kyung, Chairperson, Financial Services Commission (FSC)
Financially, only the top 20 cryptocurrencies can be traded, potentially reducing smaller token viability. Exchanges must disclose sales and use of proceeds.
The regulatory changes represent a shift from South Korea’s 2017 ban on institutional crypto trading. These steps indicate a rapidly evolving market landscape.
The FSC’s measures offer potential for increased market stability and institutional confidence. Historical trends suggest growing global regulatory frameworks could emerge, influencing South Korea’s approach.