Original source: Newsis
Original translation: KarenZ, Foresight News
On February 13, South Korea held the third meeting of the Virtual Asset Committee, planning to allow legal persons to open virtual asset real-name accounts in stages and gradually open up institutional participation in the virtual currency market. This policy marks that South Korea has officially opened the door to the virtual asset market to legal person investors, which not only reflects the changes in the virtual currency market environment in South Korea, but also heralds the mainstream trend of cryptocurrency. But at the same time, law enforcement agencies such as the procuratorate and the National Tax Service have been allowed to open real-name accounts, and may transfer and sell criminal proceeds confiscated with virtual currency and tax-delinquent property, which may cause market concerns.
So what instructions did the third virtual asset committee meeting of the Financial Services Commission of South Korea hold today? The following content is compiled from Newsis.
Kim So-young (transliteration), vice chairman of the Financial Services Commission of South Korea, convened the third meeting of the Virtual Asset Committee and decided to advance the plan for legal persons to open real-name accounts for virtual assets in three stages. First, law enforcement agencies, non-profit legal persons, virtual asset exchanges and other institutions that need to open accounts for cashing purposes will be allowed to participate. In the future, it will gradually expand to professional investment legal persons (investment and financial purposes) and ordinary legal persons.
Therefore, the Financial Services Commission of South Korea has drawn up a roadmap to gradually allow legal entities to participate in the virtual currency market without compromising user protection and market stability.
Phase 1: Law enforcement agencies, non-profit legal entities, and exchanges
Law Enforcement Agency Account Opening (Completed)
Procuratorial organs, the National Tax Service, the Customs Service, local governments, etc. need to transfer and sell virtual assets for the confiscation of criminal proceeds and the compulsory collection of unpaid tax property. These institutions have been allowed to open accounts since November last year.
Opening of non-profit legal entity accounts (planned to be completed in the second quarter of 2025)
Since non-profit legal entities such as designated donation groups need to receive and liquidate virtual asset donations, they will be allowed to open legal entity accounts in the second quarter of this year. However, due to the lack of specific standards and procedures in the process of receiving and liquidating virtual assets, internal control standards need to be established 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 from transaction fees, etc. need to be sold for operating expenses such as employee salaries and taxes, so there is an urgent need to carry out sales transactions.
Given that such sales transactions may be proprietary in 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 quantities of virtual assets sold.
Phase 2: Professional investment entities (planned to start in the second half of 2025)
The second phase of the policy plan to be implemented in the second half of this year will allow 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 target listed companies and legal persons registered as professional investors (about 3,500). This is to pilot legal person transactions for investment and financial purposes, and will gradually open up mainly 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 formulate relevant guidelines and monitoring measures before implementation. In addition, due to the different investment capabilities of various legal persons, the opening of accounts will be subject to detailed review by banks and exchanges.
Phase 3: Participation of ordinary legal persons (medium- and long-term plans)
The full participation of ordinary legal persons will be studied as a medium- and long-term plan, as it involves secondary legislation related to virtual assets and institutional adjustments such as foreign exchange taxation. The second phase of legislation needs to include supervision of the business behavior of virtual asset exchanges and a regulatory system for stablecoins. At the same time, the Foreign Exchange Transactions Act needs to be improved to monitor cross-border virtual asset transactions.
Future plans and prospects
The Financial Services Commission plans to work with the government and private institutions to develop guidelines for legal entities to participate in virtual asset investments. Kim So-young, vice chairman of the Financial Services Commission, said: Regarding the second phase of virtual asset-related laws, including stablecoins, dealers, and trading supervision, we will accelerate discussions within the Virtual Assets Commission. He also added: Regarding token securities, relevant legal amendments have been submitted, and we will actively support the rapid passage of the bill by the National Assembly.
