Starting from the 20th, the review process for virtual asset business operator registrations will be significantly strengthened. While previous reviews focused on representatives and executives, the revised process will now extend scrutiny to major shareholders, examining their legal violation history and financial soundness. Operators must also meet requirements such as a debt ratio of 200% or lower and at least four anti-money laundering (AML) personnel. Even businesses that have already completed registration must reapply by November 20th to comply with the new standards.
The FIU and Financial Supervisory Service held the explanatory session on the 13th, detailing these changes for current and prospective virtual asset business operators. The revisions follow the implementation of the amended Specific Financial Information Act, which passed the National Assembly in January and takes effect on the 20th. A total of 28 virtual asset businesses are currently registered under the Act.
The most significant change is the inclusion of major shareholders in the registration review process. Moving forward, shareholders with 10% or more ownership, as well as those influencing executive appointments or key business decisions, will be subject to scrutiny. Affiliates of the largest shareholder, or if the largest shareholder is a corporation, its major shareholders and representatives, will also fall under the reporting scope.
Review criteria have been tightened. Legal violation histories of major shareholders will be examined more broadly, including not only existing anti-money laundering and financial regulations but also violations of the Fair Trade Act, Tax Crime Punishment Act, Specific Economic Crimes Act, and the Narcotics Control Act. Operators must generally maintain a debt ratio of 200% or lower and will undergo social credit assessments, including checks for debt defaults or business suspension history.
AML personnel requirements have also been specified. Operators must secure at least four dedicated personnel, including a compliance officer and a reporting officer, with the compliance officer required to have relevant experience or qualifications. However, partial concurrent roles may be permitted based on business scale.
The review will not stop at examining documents related to computer systems and internal controls but will also assess whether they are actually operational. Computer systems handling unique identification information or personal credit information must be located domestically, and the Financial Supervisory Service may conduct on-site inspections if necessary.
Change reporting will also become stricter. Previously, businesses had to report changes in major shareholders or legal compliance systems within 14 days after the change, but now they must report 30 days in advance. Existing businesses are not exempt. Businesses whose reports were approved as of August 20 must re-report their major shareholders, financial status, legal compliance systems, etc., according to the new standards by November 20.
Financial authorities have also specified criteria for determining whether non-custodial wallet providers should be subject to virtual asset business reporting. Non-custodial wallets where the business does not have exclusive control over users' private keys may be excluded from reporting requirements. Factors such as whether the business can unilaterally transfer virtual assets, whether it can arbitrarily generate, recognize, or decrypt private keys, and whether the user is the actual signing authority will be comprehensively evaluated.
Ha Joo-sik, head of the FIU's Institutional Operation Planning Division, stated, “As the virtual asset market has grown to significantly impact the public's economic life and financial markets, the situation has changed since 2021 when the virtual asset reporting system was first introduced.” He added, “Strict entry regulations for businesses and major shareholders align with international standards such as the Financial Action Task Force (FATF) and regulatory directions in major countries.”
