South Korea’s top financial regulator will start allowing charities, universities and crypto exchanges to sell certain cryptocurrency holdings in the first half of this year amid “growing demand” for institutional crypto trading.
This comes after the Financial Services Commission reportedly announced last month that it will allow institutional investors to trade crypto in stages.
The FSC announced today that it will soon enable charities and universities to sell their crypto holdings received as donations in the second quarter.
The regulator also plans to allow South Korean crypto exchanges to sell their crypto assets, received as fees, for cash to cover operating costs such as payroll and tax payments.
“However, considering the potential for conflicts of interest with users arising from mass sales by exchanges, the plan is to gradually allow this after establishing a common ‘Sales Guideline’ among operators,” the FSC said in a translated statement.
Under the country’s act on the use of financial information, only retail traders who have been verified with their official government names are allowed to trade cryptocurrencies. The FSC has been instructing banks to restrict institutions from opening accounts on exchanges.
“There is a growing demand within the country to allow corporate transactions of virtual assets,” the FSC said in its Thursday statement. “Major countries abroad are broadly allowing corporate participation in the market, and domestic companies are experiencing increasing demand for new businesses related to blockchain, indicating a changing market environment.”
In the second half of this year, the financial regulator plans to launch pilot tests to permit about 3,500 listed firms and companies registered as professional investors to open real-name accounts for investment purposes.
Since late last year, the FSC has permitted law enforcement agencies to set up accounts for liquidating their crypto holdings seized from illicit activities, according to Yonhap news agency.
South Korea’s first crypto regulatory framework went into effect in July last year, which focused on crypto investor protection. The FSC has begun discussions to develop a follow-up regulation to its crypto regulatory framework and aims to draft the legislation within the second half of this year, according to local media reports.
South Korea is home to one of the world’s largest crypto markets. Last month, Upbit, a Korean crypto exchange, ranked as the world's fourth-largest centralized exchange by monthly exchange volume.
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