South Korean authorities have banned local universities that want to convert crypto assets into cash from opening corporate accounts due to the high risk of money laundering.

According to local media reports, many universities have asked authorities to open bank accounts to cash out large donations in cryptocurrencies. Currently, in order to sell coins or convert them into Korean won, users of crypto exchanges are required to have an account under a real name, and banks refuse to open accounts for domestic corporations and institutions dealing with crypto assets.

South Korea's Financial Intelligence Unit (KoFIU) and the Ministry of Education are concerned that corporate accounts, as opposed to individual accounts, are easier to use for money laundering through cryptocurrencies due to a lack of identity verification. Officials explained their refusal by saying that providing exceptions for educational institutions would be unfair to organizations or companies operating in other areas.

The departments recommended that universities refrain from accepting donations in cryptocurrencies. This puts universities that already have digital assets in a difficult position, so authorities are exploring the possibility of creating a special system for them to use to cash out the coins they receive.

Let us recall that in April, South Korean politicians promised local crypto investors expanded benefits, while financial regulators in South Korea are preparing to tighten the rules for listing new altcoins on centralized crypto exchanges operating in the country.