- Korea‘s Financial Services Commission has established new rules allowing nonprofits to receive cryptocurrency donations under specific guidelines.
- New regulations address how cryptocurrency exchanges handle token payments, including restrictions on selling tokens received as fees.
- Stricter standards for listing new tokens, memecoins, and “zombie coins” aim to reduce market volatility and protect investors.
Korea’s Financial Services Commission (FSC) has introduced comprehensive cryptocurrency regulations following a recent meeting of its Virtual Assets Committee.
The new framework, announced last week, establishes guidelines for nonprofit cryptocurrency donations, exchange operations, and token listings.
The committee, which includes representatives from the Korea Federation of Banks and the Digital Asset Exchange Association (DAXA), also addressed concerns about volatile “zombie coins” and memecoins.
Under the new rules, nonprofit organizations can now accept cryptocurrency donations, but must adhere to strict protocols. These organizations must outsource donation processing to entities with at least five years of relevant experience.
Additionally, nonprofits can only accept cryptocurrencies traded on a minimum of three Korean exchanges and must implement policies to immediately convert crypto donations to cash.
To comply with anti-money laundering regulations, all donations must be made directly through cryptocurrency exchanges.
Exchange Operations and Token Sales
The regulations also target cryptocurrency exchanges that receive tokens as payment fees. To prevent conflicts of interest, exchanges can only sell these tokens to cover operational expenses and must conduct sales through third-party platforms rather than their own.
Sales are restricted to popular cryptocurrencies ranking in the top 20 on at least five Korean exchanges, with daily volume limitations to prevent market disruption.
Addressing Market Volatility
To combat price volatility, the FSC introduced specific rules for newly listed tokens, establishing requirements for initial supply levels and capping order volumes immediately after listing. Memecoin trading faces strict criteria, including prior listing on eligible foreign exchanges, a community of at least 100,000 people, and cumulative transaction volumes exceeding one million.
The regulations also address “zombie coins” – thinly traded tokens with minimal activity. These must be delisted if their daily transaction volumes remain below 1% of market capitalization and total issuance value falls under 4 billion Won (approximately $2.9 million) for 30 consecutive days.
During discussions, committee members highlighted the urgent need for new legislation concerning security token offerings (STOs). Meanwhile, in a parallel development, Korean banks announced a collaborative project to develop a stablecoin, further indicating the country’s evolving approach to digital assets.
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