South Korea’s Financial Regulator to Allow Institutional Crypto Sales

• The FSC will permit universities and charities to sell donated crypto holdings, with implementation expected in the second quarter of this year.
• Crypto exchanges in South Korea will be allowed to sell transaction fee holdings for operational costs, following a standardized sales guideline.
• The regulator is preparing pilot programs to enable 3,500 firms and professional investors to open real-name crypto trading accounts later this year.

South Korea’s Financial Services Commission (FSC) has revealed plans to permit specific institutions, including charities, universities, and cryptocurrency exchanges, to sell their digital asset holdings. The regulator’s decision comes amid an increasing demand for institutional cryptocurrency trading within the country. 

Charities and Universities to Sell Donated Crypto Holdings

The FSC confirmed that it will allow charities and universities to liquidate cryptocurrency donations beginning in the second quarter of this year. This policy change enables these institutions to convert their digital assets into cash, addressing regulatory limitations that previously restricted them from selling crypto holdings.

The decision is part of the FSC’s broader approach to regulate and integrate cryptocurrency transactions into South Korea’s financial system. The regulator is also advancing efforts to establish a structured framework for corporate participation in digital asset trading.

Crypto Exchanges to Sell Holdings for Operational Costs

Alongside institutional crypto sales, the FSC has announced that domestic cryptocurrency exchanges will be permitted to sell digital assets received as transaction fees. This measure aims to help exchanges manage operational expenses such as payroll and tax obligations.

However, the FSC has acknowledged potential conflicts of interest arising from large-scale cryptocurrency sales by exchanges. To address these concerns, the regulator intends to implement a standardized “Sales Guideline” before fully allowing exchanges to convert crypto assets into cash. The process will be introduced in stages to mitigate market disruptions.

Regulatory Expansion and Future Policy Plans

The FSC’s regulatory framework for cryptocurrency trading has been evolving since the introduction of South Korea’s first crypto regulatory law in July last year. Under current financial laws, only verified retail traders with government-registered names are permitted to trade cryptocurrencies.

The regulator has been enforcing restrictions on institutional accounts, instructing banks to prevent companies from opening trading accounts on exchanges. Despite these limitations, the FSC has recognized a growing demand for corporate digital asset transactions.

In the second half of the year, the FSC plans to conduct pilot programs allowing approximately 3,500 listed companies and registered professional investors to open real-name crypto trading accounts. The financial regulator is also working on a follow-up to the existing regulatory framework and is expected to draft new legislation by the end of the year.