South Korea Tightens Crypto AML Rules Ahead of Institutional Investment Rollout

In Brief:

South Korea to enhance AML and KYC checks on institutional clients starting June.

Move aims to lift the ban on institutional crypto investment by late 2025.

South Korea is moving to tighten anti-money laundering (AML) and know-your-customer (KYC) regulations for institutional participants in the cryptocurrency sector, according to a report by The Block. The new rules come as the country prepares to gradually ease restrictions on institutional crypto investment.

Starting in June 2025, non-profit organizations and registered cryptocurrency exchanges will be allowed to sell their crypto holdings, marking a significant shift in policy. The Financial Services Commission (FSC) has directed both exchanges and partner banks to conduct more detailed reviews of the source of funds and transaction purposes for all new institutional clients.

These tighter AML and KYC protocols are designed to pave the way for broader institutional participation, with plans to allow listed companies and financial institutions to engage in direct trading on crypto exchanges by the second half of 2025.

The regulatory overhaul reflects South Korea’s effort to balance market innovation with investor protection, especially as global demand for institutional crypto exposure grows. Authorities are prioritizing compliance and transparency to prevent illicit use while expanding market access for legitimate players.

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