South Korea Universities Face Banking Hurdles in Converting Crypto Donations to Cash

South Korea

Crypto Reporter

Shalini Nagarajan

Crypto Reporter

Shalini Nagarajan

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Shalini is a crypto reporter who provides in-depth reports on daily developments and regulatory shifts in the cryptocurrency sector.

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Last updated:

May 28, 2024 00:31 EDT

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Financial authorities in South Korea are prohibiting universities from opening corporate accounts for coin transactions. This is resulting in their inability to convert cryptocurrency donations provided by certain crypto businesses into cash.

Local outlet Chosun Ilbo reported Monday that financial authorities are concerned that corporate accounts, unlike individual accounts with real names attached, can be used for money laundering more easily due to the lack of individual verification.

The Korean Financial Intelligence Unit (KoFIU) and the Ministry of Education are reportedly expected to uphold their position on prohibiting universities from opening corporate accounts for coin transactions.

South Korea Universities Stuck with Crypto Donations, New Rules Planned

This decision comes after some universities requested to open corporate accounts for cash conversion, following large coin donations they received.

A senior official from the financial authorities explained the decision, saying that allowing universities an exception would be unfair to other businesses. Furthermore, opening such accounts for all corporations would create a significant money laundering risk.

Further, financial authorities and the Ministry of Education intend to advise universities to steer clear of accepting such donations in the future. However, they might offer a lifeline for universities already holding such donations.

Depending on the amount and other factors, a system for converting these existing coins into cash might be established. This suggests a possible solution for universities struggling with previously received cryptocurrency donations.

South Korea Bans Cryptocurrency Donations

South Korea recently slammed the door on cryptocurrency donations. This new policy prohibits charities from accepting digital currencies, potentially impacting their fundraising efforts.

The decision comes despite the surging popularity of Bitcoin (BTC) and other digital currencies in the country.