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South Korean Donation Law Revision Omits Cryptocurrencies, Impacts Charities

Algoine News
Summary:
South Korea's revised donation legislation now excludes digital currencies, potentially affecting the country's charities and fundraising efforts. From July, donors will be able to use various means, excluding cryptocurrencies, to donate to charitable organizations. The Ministry has offered no explanation for omitting digital currencies despite their popularity in the country. Meanwhile, South Korea plans to upgrade its temporary crypto crime investigation unit to an official department due to the rise of cryptocurrency-related crimes. Concurrently, Crypto.com, a Singapore-based crypto exchange, is facing regulatory difficulties in South Korea.
Revisions to South Korea's donation legislation have omitted digital currencies, potentially hampering charities and fundraising initiatives in the country. On 5th of May, The Kyunghyang Shinmun, a local newspaper disclosed that the Ministry of Public Administration confirmed the deliberated changes to the "Donations Act". These changes, although inclusive of several other alternative means, excluded the use of cryptocurrencies for charitable donations. As of July, donors can utilize numerous alternative means such as department store gift vouchers, stocks, and Naver, a local internet mogul's loyalty points, but not digital currencies like Bitcoin. The legislation, first put into law in 2006 before the widespread use of smartphones and diverse payment methods, broadened the means of donations from only online methods and bank transfers to include postal services, logistics services, and automated response systems. The Ministry has not yet provided a rationale for excluding cryptocurrencies as a means of donations, despite their growing popularity in the country. Exceptions for donations will be included for locally government-issued stablecoins pegged to the Korean Won, and blockchain-issued gift vouchers. As per the data by TheGivingBlock, around $2 billion in donations were made globally using cryptocurrencies till January 2024. A market that local charities will be excluded from exploring. Conversely, more than half of the charities based in the USA are now accepting digital asset donations. In April, it was reported that South Korea plans to elevate its temporary crypto-related criminal investigation department to an official capacity in light of the rising incidences of cryptocurrency-related crimes and financial fraud. In connected news, Crypto.com, a Singapore-based cryptocurrency exchange, is facing challenges in establishing itself in South Korea due to regulatory obstacles. Earlier in April, South Korean authorities identified potential Anti-Money Laundering (AML) issues in the data provided by the exchange, sparking an "emergency on-site inspection" to monitor the company's operations.

Published At

5/6/2024 9:06:15 AM

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