The South Korea Financial Services Commission has proposed amendments to the Enforcement Decree under the Act on Reporting and Using Specified Financial Transaction Information and related subordinate rules to tighten virtual asset service provider (VASP) registration requirements and strengthen anti-money laundering (AML) obligations for virtual asset transfers. The package also updates how sanctions against retired VASP employees are notified. Entry screening would expand the scope of major shareholders subject to scrutiny to include the largest shareholder, CEO, controlling shareholder, and, where the largest shareholder is a corporate entity, its CEO and representative. Registration would be conditioned on financial soundness and credibility tests, including a debt ratio of 200% or below and no defaults in the past three years for both VASPs and their largest shareholders, alongside disqualifications linked to insolvent institutions or prior licence revocations and qualification requirements tied to the Act on Corporate Governance of Financial Companies. Organisational prerequisites would include required personnel such as a compliance officer, IT systems, and internal controls to support AML and user protection; sanctions on retired employees would be notified via the Financial Supervisory Service. On transfers, the domestic travel rule threshold would be removed by extending it to transactions below KRW 1,000,000, and the beneficiary would be required to secure originator information; cross-border transfers with overseas VASPs or digital wallet providers would be permitted only under specified conditions, while any transfer of KRW 10 million or more to such overseas counterparties would need to be reported to the KoFIU regardless of transaction risk. Customer due diligence would also be strengthened to include verification of information accuracy and more rigorous checks for high-risk individuals and high-risk products or services. Comments are open from March 30 to May 11, 2026, with the rules then proceeding through legislative review and approval ahead of an intended effective date of August 20, 2026.
South Korea Financial Services Commission 2026-03-30
South Korea Financial Services Commission consults on tougher VASP registration tests and expanded travel rule including KRW 10 million overseas transfer reporting
The South Korea Financial Services Commission has proposed amendments to tighten virtual asset service provider registration and strengthen anti-money laundering obligations for virtual asset transfers. Key measures include expanded major shareholder scrutiny, new financial soundness and organisational requirements, removal of the KRW 1,000,000 domestic travel rule threshold, stricter conditions and reporting for cross-border transfers, and enhanced customer due diligence.