Regulators gain wider discretion to vet shareholders, finances and controls as South Korea tightens crypto market access.
South Korea’s National Assembly has approved an overhaul of the country’s crypto licensing regime, tightening entry requirements for virtual asset service providers (VASPs) and expanding scrutiny to include controlling shareholders.
On Thursday, lawmakers passed an amendment to the Act on Reporting and Using Specified Financial Transaction Information, a cornerstone of Korea’s Anti-Money Laundering (AML) framework for digital assets. The committee substitute bill was approved at a plenary session and is expected to take effect six months after the law is enacted.
The new rules widen background checks for crypto firms applying to operate in South Korea. Regulators will now vet not just company executives but also major shareholders. The list of red flags has expanded beyond financial crimes to include offenses such as drug trafficking, tax evasion, fair-trade violations, serious economic crimes and breaches of the country’s crypto user protection law.
