South Korea's crypto policy trend: shifting to loosening, allowing legal persons to open encrypted real-name accounts
Reprinted from panewslab
02/13/2025·3MSource: Newsis
Compiled by: KarenZ, Foresight News
On February 13, South Korea held its third virtual asset committee meeting, planning to allow legal persons to open real-name accounts for virtual assets in stages and gradually open up institutional participation rights in the virtual currency market. This policy marks South Korea's official opening of the door to the virtual asset market to legal investors, reflecting the changes in the South Korean virtual currency market environment, and also heralding the trend of mainstreaming cryptocurrencies. But at the same time, law enforcement agencies such as the procuratorate and the State Taxation Department have been allowed to open real-name accounts, which may transfer and sell criminal proceeds confiscated in virtual currency and tax-affected property, which may cause market concerns.
So what instructions are there for the third virtual assets committee meeting held by the Korea Financial Committee today? The following content is compiled from Newsis.
Kim So-young (transliteration), vice chairman of the Korea Financial Committee, held the third meeting of the Virtual Assets Committee and decided to promote the plan of legal persons to open virtual asset real-name accounts in three stages. First, law enforcement agencies, non-profit legal persons, virtual asset exchanges, etc. are allowed to "cash" due to "enforcement agencies, non-profit legal persons, and virtual asset exchanges. "Institutions that require the participation of opening an account will be gradually expanded to professional investment legal persons (investment and financial purposes) and ordinary legal persons in the future.
Therefore, the Korean Financial Commission has formulated a roadmap to gradually allow legal persons to participate in the virtual currency market without damaging user protection and market stability.
Phase 1: Law enforcement agencies, non-profit legal persons and exchanges
Law Enforcement Agency Account Opening (Completed)
Procuratorates, the State Taxation Department, the Customs Department, local governments, etc. need to transfer and sell virtual assets due to the confiscation of criminal proceeds and the forced collection of tax-affordable property. These institutions have been allowed to open accounts since November last year.
Opening of non-profit legal person account (planned to be completed in the second quarter of 2025)
Since non-profit legal entities such as designated donation groups need to receive and cash out donations for virtual asset, they will be allowed to open legal person accounts in the second quarter of this year. However, because it lacks specific standards and procedures in the process of receiving and monetizing virtual assets, internal control standards need to be formulated in advance.
Opening of virtual asset exchange accounts (planned to be completed in the second quarter of 2025)
The virtual assets (own assets) obtained by the exchange due to handling fees and other transactions need to be sold for employee salaries, taxes and other operating expenses, so the sale transaction is urgently needed.
Given that such sales transactions may have self-operated nature and may cause damage to users such as price drops, the South Korean government plans to formulate public guidelines to limit the types and quantity of virtual assets sold.
Phase 2: Professional investment legal person (planned to be launched in
the second half of 2025)
The second phase of policy plan, which will be promoted in the second half of this year, allows professional investment legal persons to invest in virtual assets. According to the Capital Market Law, professional investment legal persons do not include financial companies, but are targeted at listed companies and legal persons registered as professional investors (about 3,500). This is to pilot the transactions of legal persons in investment and financial purposes, and it is gradually relaxed from the buying and selling transactions of institutional investors with risk tolerance.
As large-scale virtual asset transactions may bring potential anti-money laundering risks, the government will implement them after formulating relevant guidelines and monitoring measures. In addition, due to the different investment capabilities of each legal person, the opening of an account will be reviewed in detail by the bank and the exchange.
Phase 3: Participation of ordinary legal persons (medium- and long-term
plan)
The full participation of ordinary legal persons will be a medium- and long-term plan research, because it involves secondary legislation related to virtual assets and institutional adjustments such as foreign exchange tax system. The second phase of legislation must include the supervision of the business behavior of virtual asset exchanges and the regulatory system of stablecoins. At the same time, the Foreign Exchange Trading Law needs to be improved to monitor cross-border virtual asset transactions.
Future plans and prospects
The Financial Commission plans to combine governments and private institutions to develop guidelines for legal entities to participate in virtual asset investment. "We will accelerate discussions within the Virtual Assets Committee on the second phase of the virtual assets law, including stablecoins, traders and transaction supervision," said Kim Syu-young, vice chairman of the Financial Committee. He also added: "About the Generation of the Generation Token Securities has submitted relevant legal amendments, and we will actively support Congress in passing the bill quickly.”
