Updated Donation Laws in South Korea Fall Just Shy of Permitting Crypto

South Korea’s newly amended donation legislation has excluded digital currencies, which could have a negative impact on the country’s charities and donation drives. The Ministry of Public Administration announced that the amendments to the “Donations Act” restrict the use of crypto assets for donation purposes. While new donation methods such as department store gift vouchers, stocks, and loyalty points from Naver will be allowed starting in July, cryptocurrencies like Bitcoin will not be accepted. The legislation, originally enacted in 2006, has expanded the methods of donation to include automated response systems, postal services, and logistics services. Despite the popularity of digital assets in South Korea, the Ministry did not provide a reason for excluding them. However, donations in local government-issued stablecoins and blockchain-issued gift vouchers will be permitted. This exclusion means that local charities will miss out on the estimated $2 billion in global cryptocurrency donations as of January 2024. In contrast, more than half of American charities now accept digital asset donations. South Korea is also working on establishing an official department to address increasing crypto-related crimes and financial fraud. Crypto.com, a Singapore-based crypto exchange, is facing regulatory hurdles in entering the South Korean market. The exchange recently underwent an on-site inspection due to Anti-Money Laundering issues found in the data it submitted.