Starting from June, South Korea lifts restrictions on the sale of virtual assets by non-profit organizations and exchanges, are you ready for the baptism?

#韩国 A big move! Non-profit organizations and exchanges can sell cryptocurrencies, but retail investors should be cautious?

Heard that South Korea has made big news again? That's right, this time they directly took action against the cryptocurrency market! On May 4th, the South Korean Financial Commission announced that starting from June 1st, non-profit organizations and virtual asset exchanges can finally legally sell the cryptocurrencies they hold. This move has made its way to global trending topics, with some applauding and others sweating—after all, South Korea is one of the countries with the largest cryptocurrency trading volume in the world, and every action could stir up massive market waves!

I. Who can sell? How to sell?

This policy mainly targets two types of institutions:

1. Non-profit legal entities (such as charities, research institutions):

- Must meet two conditions: Established for more than 5 years and passed external audits, while an internal 'Donation Review Committee' must be formed to supervise the acceptance and monetization of virtual assets.

- Any received cryptocurrency must be sold immediately, and only mainstream coins listed on at least 3 Korean exchanges (such as Bitcoin, Ethereum) can be sold. Coins like Dogecoin and meme coins are off-limits!

2. Virtual asset exchanges:

- The money from selling coins can only be used to pay employees' salaries, taxes, and other operating expenses, and cannot be pocketed by the bosses.

- There are strict limits on how much can be sold each day, with specific numbers yet to be announced, but referring to historical operations of South Korean exchanges, for example, Upbit once reduced the daily deposit limit for personal accounts from 10 million won to 5 million won. This move is intended to prevent exchanges from dumping assets at once, especially since retail investors account for as much as 99%, and market fluctuations are not to be taken lightly!

II. The 'blade light and sword shadow' behind the policy

Why did South Korea suddenly relax restrictions? In fact, it was forced. Over the past few years, South Korea's crypto market has been rife with chaos:

- Retail speculation is rampant: In the 'flash crash' triggered by political events in April 2025, XRP temporarily plummeted by 60%, leaving countless retail investors with nothing.

- Zombie coins are rampant: Many tokens with insufficient liquidity are manipulated by whales, and schemes like 'listing and pumping' are common.

- Regulatory loopholes: Previously, only law enforcement agencies and exchanges could open corporate accounts, leaving a large amount of crypto assets lying dormant in non-profit organization accounts, wasting resources and generating risks.

This new regulation aims to use scalpel-like regulation to cut off the tumor:

- Require assets to be listed on more than 3 exchanges, directly eliminating 90% of 'air coins';

- Non-profit legal entities must 'liquidate immediately' to avoid price manipulation from long-term holding;

- Daily transaction limits act like a 'leash' on the market, preventing drastic rises and falls.

III. Who wins and who loses? Understanding these three points is enough!

1. Non-profit organizations: Experiencing both pain and joy

- Benefits: Finally able to turn received Bitcoin and Ethereum into real cash, for instance, environmental organizations can use the money from selling coins to buy equipment, and research institutions can pay salaries.

- Trouble: Must establish a 'Donation Review Committee', and every transaction must be recorded, leading to rising compliance costs. Moreover, they can only sell mainstream coins, and institutions receiving niche coins may end up crying in the bathroom.

2. Exchanges: Short-term pain, long-term gain

- Pressure: If the transaction fee income is in cryptocurrency, it must be sold in batches, which may face price fluctuation losses. For example, if Bitcoin crashes one day, the operating funds of the exchange will shrink that day.

- Opportunities: Compliant exchanges can attract institutional funds. South Korea plans to open corporate accounts in three phases, with professional investment institutions entering the market in the second half of the year, and ordinary businesses may also join in the future. This means that the cake for exchanges will continue to grow!

3. Retail investors: Avoid altcoins!

- Mainstream coins have become more stable: The liquidity of leading coins like Bitcoin and Ethereum is already strong, and after the new regulations are implemented, their trading volume on South Korean exchanges may reach new highs.

- Altcoins are in trouble: Small coins not listed on more than 3 exchanges are directly excluded from legal trading. During the 'flash crash' in April 2025, many retail investors lost a lot by following the trend and buying altcoins. This policy is equivalent to sentencing altcoins to 'death'.

IV. Future big moves: Is South Korea aiming to become a global benchmark for cryptocurrency regulation?

This is just an appetizer; South Korea has more plans in store:

1. Legislation on stablecoins: Regulations requiring stablecoin issuers to maintain a 1:1 reserve will be introduced in the second half of the year to prevent collapses like that of UST.

2. Approval of spot ETFs: The ruling party, the People Power Party, plans to allow Bitcoin spot ETF trading by 2025, which means retail investors can indirectly invest through funds, reducing risks.

3. Lifting bank restrictions: Now, exchanges can only collaborate with one bank, but in the future, they can connect with multiple banks to enhance the efficiency of fund transfers.

V. What should ordinary investors do?

- Hold on to mainstream coins: The liquidity advantage of Bitcoin and Ethereum in South Korean exchanges will be more evident, and the risk of long-term holding is relatively low.

- Stay away from meme coins: The policy clearly restricts non-compliant assets, and those 'air coins' that rely on speculation may be removed at any time.

- Pay attention to institutional trends: After professional investment institutions enter the market in the second half of the year, market style may shift from retail speculation to value investing. Early layout is necessary to seize opportunities.

Conclusion

South Korea's policy adjustment is essentially walking a tightrope between regulating the market and promoting innovation. For ordinary investors, this is a signal— the cryptocurrency market is transitioning from 'wild growth' to 'professional competition'. If you are still trading based on 'hearsay' or 'friend recommendations', you should be careful! The future winners will definitely be those who understand the rules, adhere to discipline, and follow the policies.