South Korea’s financial watchdog is tightening the screws big time as they get ready to throw open the doors for institutional players to waltz into the crypto market.
You thought crypto was wild before? Well, I’ve got some news for ya.
Oversight
Earlier this week, the Financial Services Commission announced a fresh batch of rules that are about to shake things up starting June.
These new guidelines are about control, compliance, and cutting out the shady business that’s been lurking in the shadows.
Nonprofit organizations can now sell cryptocurrencies, but only if they’ve got a solid track record, five years of audited financial history, no less.
And get this, they have to set up internal Donation Review Committees to scrutinize every single crypto donation and figure out how to liquidate it properly. It’s like a financial mob boss making sure no funny business slips through.
To keep the money laundering rats at bay, every donation must pass through verified Korean won exchange accounts.
Banks, exchanges, and nonprofits all share the blame for making sure the money trail is squeaky clean.
Plus, only cryptocurrencies listed on at least three major domestic exchanges get the green light. And when they get the dough? Liquidation happens immediately.
Requirements
Now, exchanges themselves aren’t off the hook. They can liquidate user fees paid in crypto, but only to cover their own operating costs.
And don’t think they can go crazy, daily sales caps are in place, usually no more than 10% of the total planned amount.
Only the top 20 tokens by market cap on five won-based exchanges get to play. Oh, and exchanges are strictly forbidden from selling tokens on their own platforms, no conflicts of interest.
The FSC is also cracking down on the so-called zombie tokens and memecoins with no real use.
If a token doesn’t meet liquidity or community engagement standards, it’s outta here. Exchanges must delist them.
Plus, new listing rules require a minimum circulating supply and temporary bans on market orders right after listing to stop bigger price swings.
Adapt
Starting June, exchanges and nonprofits can apply for real-name accounts to handle these sales, with plans to extend this to listed firms and pro investors later this year. Transparency is the name of the game.
So, South Korea’s crypto market is getting a serious makeover. Whether you’re a nonprofit, an exchange, or a big-shot investor, the game’s changed. Hopefully, into the right direction.
Disclosure:This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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