South Korea is poised to redefine its approach to digital assets by lifting an eight-year ban that prevented corporations from engaging in trading cryptocurrencies. The Financial Services Commission (FSC) made this announcement, detailing that local non-profits and exchanges can now sell their digital assets, provided they comply with stringent regulatory requirements.
The regulatory changes come after a lengthy hiatus, during which the FSC prohibited corporate sales of cryptocurrencies in December 2017, primarily aimed at mitigating speculative trading practices and preventing exchanges from competing with regular users. Market dynamics have evolved considerably since then, leading to renewed discussions about corporate participation in cryptocurrencies. In early 2025, the FSC hinted at the possibility of allowing corporations to hold digital assets, but initial steps were cautious, signaling the agency’s desire for careful analysis before implementation. Now, the FSC has indicated it is ready to proceed with its new policy framework.
Under the updated regulations, cryptocurrency exchanges must register as virtual asset operators and are permitted to sell only for the purposes of covering operational costs. The FSC has established parameters to limit market impact; selling is restricted to the top 20 tokens by market capitalization available on the five leading local exchanges. Furthermore, daily sales are subject to established limits, and exchanges are explicitly barred from conducting transactions on their platforms to avoid conflict of interest.
The operational framework requires exchanges to gain a board approval prior to any sales, coupled with robust disclosure mandates directed to the FSC. This structured approach is designed to enhance oversight and instill confidence in the trading process.
The new directives also open avenues for non-profits that receive digital asset donations, allowing these organizations to convert such donations into cash for the first time. With approximately 14,000 non-governmental organizations (NGOs) operating in South Korea, this expanded privilege could significantly augment funding channels for these bodies.
Compliance is non-negotiable; corporations involved in these sales must undergo external audits conducted by firms with a minimum of five years’ experience in the field. Sales are limited to tokens listed on at least three local exchanges and must be liquidated immediately upon receipt. The FSC reinforced its commitment to combating financial crime, announcing enhanced verification measures for transaction purposes and the origins of funds. All transactions must occur through domestically linked won accounts, necessitating comprehensive customer verification by banks, exchanges, and corporations.
In a bid to safeguard market integrity, the FSC warned against the listing of what they term “zombie coins,” which lack substantial local transaction volume and fail to meet specific market capitalization criteria. The guidelines dictate cautious listing practices concerning memecoins, permitting their inclusion only after they satisfy trading thresholds and demonstrate consistent performance on reputable offshore exchanges.
These regulatory updates coincide with a politically charged environment in South Korea, as voters prepare to elect a new president. Candidates from the ruling People Power Party (PPP) and the opposition Democratic Party (DP) have both aimed their campaign strategies at the 15 million citizens involved in trading digital assets. Their proposals include promises for enhanced legal frameworks and innovative “crypto” products, emphasizing the establishment of digital asset exchange-traded funds (ETFs) and stablecoins tied to the won.
In parallel developments across the globe, Russia is also grappling with its regulatory stance on digital assets. The Russian government is advancing legislation aimed at enabling the seizure of digital assets used in illicit activities. The Federal Ministry of Justice has formulated this bill, recognizing digital assets as property subject to confiscation by the state. Deputy Justice Minister Vadim Fedorov indicated during a recent industry discussion that as cryptocurrency adoption proliferates, the government is crafting legal mechanisms to address related criminal activities.
Fedorov’s comments highlighted the challenges posed by the anonymity and decentralized nature of digital currencies, which he argues render them more attractive for criminal enterprises compared to traditional cash. However, data from Chainalysis suggests that illicit activities accounted for merely 0.14% of all digital asset transactions in 2024, challenging the narrative of rampant criminality in the crypto space.
Compounding these regulatory measures, the Ministry of Finance in Russia is advocating for a bill that would impose harsh penalties on individuals engaging in digital currency transactions domestically. This proposal includes fines of up to 200,000 rubles (approximately $2,500) for individuals and up to 1 million rubles ($12,500) for corporate entities. Despite the prohibition against domestic transactions, Russian firms have increasingly turned to digital assets for international trade, particularly with partners in China and India, underscoring a growing trend in the use of cryptocurrencies for global commerce.
As South Korea and Russia navigate their respective regulatory landscapes, it is evident that the evolution of cryptocurrency regulation is fraught with challenges and opportunities. For South Korea, the implications of allowing corporate transactions in digital assets may reshape its financial ecosystem, potentially attracting new investments and innovations. Conversely, Russia’s stringent measures reflect a broader struggle to integrate cryptocurrencies within existing legal frameworks while addressing concerns about crime and illicit use.
Both nations’ approaches signal a pivotal moment in the global dialogue on cryptocurrency regulation, as governments consider how to balance innovation with oversight in an increasingly digital economy. As developments unfold, observers and investors alike will be closely monitoring these shifts, evaluating their potential impacts on market dynamics and regulatory frameworks worldwide.
This regulatory evolution raises important questions. What’s your take? Share your thoughts with our growing community of readers.