South Korea Tightens the Screws: New Crypto Regulations Hit Nonprofits and Exchanges

Seoul’s latest crackdown isn’t just targeting exchanges—nonprofits are now in the crosshairs too. The move signals a broader regulatory squeeze as authorities scramble to ’protect investors’ (and maybe their own tax revenue).

Exchanges face stricter reporting rules while nonprofits—often used as loopholes for fundraising—get fresh scrutiny. Because nothing says ’decentralized future’ like paperwork and compliance headaches.

Bonus jab: If history repeats, these rules will either be bypassed by creative crypto lawyers or ignored until the next bull run washes all sins away.

TLDR

• Nonprofits Face Tight Crypto Rules Starting June
• Crypto Exchanges Hit With Strict Token Sale Limits
• FSC Targets Zombie Coins and Meme Tokens
• Institutional Investors Set to Enter Crypto Market
• Stablecoin and ETF Discussions Signal Pro-Crypto Shift

South Korea has finalized new cryptocurrency regulations targeting nonprofit organizations and digital asset exchanges. The Financial Services Commission (FSC) confirmed that the new rules will take effect in June. These updates come as the country prepares to allow institutional investors into the market.

Tighter Rules for Nonprofit Crypto Sales Begin in June

The updated guidelines require nonprofits to meet strict standards before accepting or selling digital assets. Entities must provide five years of audited financial records and FORM internal Donation Review Committees. These measures improve accountability and prevent illegal financial activities like money laundering.

🇰🇷 South Korea’s crypto-friendly approach and global leadership shine through. The FSC’s new rules, effective June 2025, for nonprofits and exchanges to sell VIRTUAL assets mark a significant step for the industry. Klein Labs sees compliance and effective regulation as vital for…

— Klein Labs (@kleinlabsxyz) May 21, 2025

Besides recordkeeping, nonprofits must liquidate digital asset donations immediately through verified Korean won exchange accounts. Only tokens listed on at least three major domestic exchanges will be accepted. Hence, organizations will need to prove that their systems consistently meet anti-money laundering standards.

Moreover, the FSC will oversee compliance with liquidation procedures for nonprofits handling token donations. Banks and exchanges will help verify each transaction to ensure transparency. The government intends to limit the misuse of crypto donations by enforcing rigorous requirements.

Stricter Listing and Sale Rules for Crypto Exchanges

New regulations also set clear boundaries for South Korean digital asset exchanges operating under the updated framework. Exchanges can sell crypto to cover operational expenses but must follow strict daily limits. These sales will only apply to the top 20 tokens by market capitalization across five major exchanges.

Exchanges will not be allowed to sell these tokens on their platforms, reducing conflicts of interest. The FSC will require exchanges to list only tokens with a significant circulating supply to avoid price manipulation. Sudden market orders will also be temporarily restricted after a new token listing to enhance market stability.

In addition, the FSC will implement new listing standards to eliminate low-volume “zombie” tokens and memecoins with no proven utility. Exchanges must monitor liquidity and user engagement to determine eligibility for listing. Failure to meet these benchmarks will result in delisting of the token to maintain investor protection.

Institutional Entry and Stablecoin Proposals Show Future Direction

The FSC plans to expand real-name account access to listed firms and institutional players later this year. This development indicates a gradual shift toward integrating larger financial entities into the crypto ecosystem. Consequently, stricter rules now serve as a foundation for safer institutional participation.

Meanwhile, political leaders are pushing for further reforms to promote adoption of digital assets in the country. A proposed Korean won-pegged stablecoin could help retain capital within South Korea’s economy. Discussions on allowing spot crypto ETFs show strong bipartisan interest in advancing the sector.

These regulatory moves reflect South Korea’s strategy to balance innovation with consumer protection. The new rules mark a pivotal moment for nonprofits and exchanges ahead of broader institutional adoption. As the landscape evolves, market players must adapt swiftly to the stricter compliance environment.