Financial Services Commission to Allow Non-Profit Organizations to Sell Virtual Assets from Next Month… New Regulations on Meme Coins and Listing Beam

From next month, it is expected that non-profit organizations and virtual asset exchanges will be able to sell virtual assets. The Financial Services Commission has also newly established regulations related to meme coins and 'listing beam' to enhance market stability.

According to the industry on the 1st, the Financial Services Commission held the 4th Virtual Asset Committee chaired by Vice Chairman Kim So-young and announced that it has finalized the guidelines for the sale of virtual assets by non-profit organizations and exchanges, as well as the revised best practices for transaction support. This is a follow-up measure to the previously announced 'Roadmap for Corporate Participation in the Virtual Asset Market' and corresponds to the second stage of institutionalizing the virtual asset market.

According to these guidelines, non-profit organizations will be able to sell their held virtual assets if they meet certain requirements. The target is limited to corporations subject to external audits and with more than five years of operation, and they must establish a donation review committee internally to pre-review the appropriateness of donations and cash-out plans.

To prevent money laundering, the Financial Services Commission plans to strengthen verification of transaction purposes and sources of funds, and only allow donations and transfers through domestic won exchanges. Accordingly, banks, exchanges, and corporations are repeatedly tasked with customer verification.

Additionally, the virtual assets received as donations are limited to items traded on at least three domestic won exchanges, and the principle is to 'cash out immediately upon receipt.' Furthermore, to prevent money laundering, verification of the purpose of donations and sources of funds is strengthened, and donations are only possible through domestic won exchange accounts.

The sale of exchanges' own holdings is also partially allowed. However, to prevent market shocks, the sale targets are limited to the top 20 items by market capitalization based on the five major won exchanges. Sales are only possible for the purpose of covering operating expenses, and the daily sale limit is expected to be restricted to around 10% of the total planned sale volume.

In particular, the act of exchanges directly selling through their platforms is fundamentally prohibited, and the sales plan must be pre-disclosed after board approval. Post-sale, details such as fund usage must also be disclosed separately.

According to these guidelines, the Financial Services Commission plans to support the issuance of sales accounts for non-profit organizations and exchanges from next month. The revised best practices for transaction support will apply to new listing items from June 1. In collaboration with the Financial Intelligence Unit (FIU), they plan to prepare customer verification (KYC) measures within this month.

Additionally, the financial authorities have decided to establish regulatory standards for the recent issues of meme coin overheating and the sharp fluctuations immediately after listing (commonly known as 'listing beam'). Meme coins that do not meet certain criteria such as the number of community members or cumulative transaction volume will be excluded from transaction support, and trading will only be allowed if there is a trading history for a certain period on eligible foreign exchanges.

Along with this, criteria for sorting out 'zombie coins' with excessively low trading volume or market capitalization have been established. For example, if the global market capitalization is less than 4 billion won for more than 30 days, or if the average daily turnover rate is less than 1%, it is selected as a zombie coin.

Measures to prevent the listing beam phenomenon are also being introduced. Newly listed items will have an obligation to secure a certain level of circulation before trading begins, and market orders and reservation orders will be restricted for a certain period immediately after listing. This is intended to prevent price distortion due to initial liquidity imbalances.

Meanwhile, the plan to issue real-name accounts for corporations registered as listed companies and professional investors, which is a follow-up procedure to the second stage of the 'Roadmap for Corporate Participation in the Virtual Asset Market,' will be announced separately in the second half of the year.