Key Takeaways
- The bill will allow donations in local government-issued, KRW-pegged stablecoins, and blockchain-issued gift vouchers.
- From July, donors can use methods such as department store gift vouchers, stocks, and Naver’s loyalty points for charitable contributions.
On May 5, South Korea’s Ministry of Public Administration announced amendments to the country’s “Donations Act,” revealing that crypto, including Bitcoin, will not be included as eligible assets for donations.
While the amendments aim to enhance online donation platforms and introduce ARS technology for contributions, they specifically exclude crypto assets starting in July. Instead, donors will have alternative methods such as department store gift vouchers, stocks, and loyalty points from Korean internet giant Naver.
The “Donations Act,” originally enacted in 2006, is being updated amidst the growing popularity of digital assets. However, South Korean charities face legal obstacles in accepting cryptocurrencies, leading to reliance on exchanges for conversion to cash.
Crypto donations gained traction in South Korea around 2020, with major contributions facilitated through platforms like Dunamu’s exchange. Starting from 2020, four large domestic charitable organizations began promoting token donations, resulting in notable contributions, including BTC 14 donated to charities aiding victims of the 2023 Turkey–Syria earthquakes.
Despite the popularity of crypto donations in South Korea, the Ministry did not provide explicit reasoning for excluding digital assets from the amended law. However, the legislation will allow donations in local government-issued, KRW-pegged stablecoins, and blockchain-issued gift vouchers.
As per a report from TheGivingBlock, globally over $2 billion has been donated using cryptocurrency as of January 2024.
The latest development comes amid reports that the country has witnessed a significant surge in cryptocurrency-related criminal activities. As per a February report from South Korea’s Financial Intelligence Unit, local crypto companies reported 16,076 suspicious transactions in 2023, representing a 49% increase compared to 2022. The country is now engaged in discussions to upgrade its Joint Virtual Asset Crime Investigation Unit into an official department.
South Korea is also looking to implement its first comprehensive crypto regulation on July 19. The new regulation will impose stricter criminal penalties for crypto crimes, including life sentences in certain cases.
