South Korea Tightens the Screws: Crypto Exchanges Face Strict KYC Rules—But Can Finally Sell Assets From June

Regulators drop the hammer—again. South Korea’s Financial Services Commission (FSC) is rolling out aggressive Know-Your-Customer (KYC) requirements for crypto exchanges, effective immediately. No more anonymous trading, no more loose compliance. The move follows global pressure to crack down on illicit flows—because nothing says ’financial sovereignty’ like bending to international demands.

But here’s the twist: exchanges get to resume selling crypto starting June. A small mercy—or just enough rope to hang themselves? After all, what’s a regulated market without a few sacrificial lambs?

Active surveillance meets reluctant permission. The FSC’s playbook? Tighten controls, then toss the industry a bone. Classic regulatory whiplash—because nothing fuels innovation like bureaucratic whack-a-mole.

Customer Verification to Mitigate Money Laundering: FSC

The regulator further said that the KYC measures WOULD protect the South Korean financial market from risks, including money laundering.

As a result, for “proper use of donated VIRTUAL assets,” non-profit corporations are limited to cryptos supported for trading on three or more Won exchanges. For digital asset exchanges, cryptos subject to sale are limited to the top 20 in terms of marketcap on the five KRW exchanges.

To prevent money laundering, the FSC has strengthened the verification of transaction purposes and sources of funds for non-profits. Additionally, it only allows donations through domestic won exchange accounts.

For exchanges, “internal control procedures such as board of directors’ resolution on virtual asset sales plans and prior disclosure obligations are also stipulated,” the financial watchdog added.

Revised Transaction Support Standards for Memecoins

The FSC has additionally laid out the revised transaction support best practices for listing zombie coins, and meme coins, “that cause instability in the virtual asset market.”

For memecoins, transaction support is only allowed when the number of cumulative transactions exceeds a certain amount, the release read.