SOUTH KOREA Law and Practice Contributed by: Wooyoung Choi, Suhhee Han, Seonghwan Ju and Matt Younghoon Mok, Lee & Ko
ple, provide Korean-language websites, run market- ing events targeting Korean customers, or enable the purchase of virtual assets using credit cards. 3.2 Set-Up Requirements Under the Act on Reporting and Using Specified Finan- cial Transaction Information, a person who intends to operate a virtual asset-related business must file a VASP registration with the financial authorities and obtain acceptance of such filing. However, the financial authorities may refuse to accept a VASP registration filing if certain statutory non-acceptance requirements are met. In this regard, the Act provides the following grounds for refusal. Notably, the requirements under items (iii) to (v) con- cerning major shareholders, as well as items (iv) and (v), were newly introduced through an amendment on 19 February 2026, and are scheduled to take effect on 20 August 2026: • (i) failure to obtain Information Security Manage- ment System (ISMS) certification; • (ii) (in cases involving exchange between fiat cur- rency and virtual assets) failure to conduct financial transactions through real-name verified deposit and withdrawal accounts; • (iii) persons (including representatives, officers, and major shareholders) with a history of violating laws such as the Act on Regulation and Punishment of Criminal Proceeds Concealment or the Narcotics Control Act; • (iv) failure to maintain sound financial condition or adequate social credibility; and • (v) failure to maintain appropriate organisational structure, personnel, IT infrastructure, and internal control systems. Among these, the “sound financial condition” require- ment, scheduled to take effect on 20 August 2026, is part of prudential regulatory measures. According to the currently proposed amendments to the Enforce- ment Decree of the Act and related supervisory regu- lations, financial authorities seeking VASP registration are expected to be required to satisfy certain condi- tions, such as: • a debt-to-equity ratio of 200% or less;
• no record of credit default or similar impairment of financial credibility over the past three years; • no designation as a distressed financial institution or revocation of licence/authorisation/registration within the past five years; and • the lapse of a certain period following prior admin- istrative sanctions. 3.3 Change of Control Under the Enforcement Decree and supervisory regu- lations of the Act on Reporting and Using Specified Financial Transaction Information, VASPs are required to report information regarding their major share- holders at the time of filing for VASP registration. In addition, where there is any change to such major shareholder information, a change report must be submitted within 14 days from the date of the change. However, under the amended Act (amended on 19 February 2026, and scheduled to take effect on 20 August 2026), the scope of reportable major share- holder information has been expanded, and supervi- sory regulations are expected to be revised to require that change reports be submitted at least 30 days prior to the effective date of such changes. At the same time, new screening and disqualification criteria for major shareholders have been introduced. As discussed in 3.2 Set-Up Requirements , accord- ing to the proposed amendments to the Enforcement Decree and supervisory regulations, a domestic cor- porate major shareholder of a VASP must satisfy cer- • not being a major shareholder or related party of a distressed financial institution or a financial institu- tion whose licence, authorisation, or registration has been revoked under financial regulatory laws; • no record of bank account transaction suspension within the past five years; and • not having been subject to bankruptcy or rehabili- tation proceedings within the past five years. tain prudential requirements, including: • a debt-to-equity ratio of 200% or less; For reference, if a major shareholder fails to meet these requirements at the time of a change report, the registration or change filing may be revoked ex officio by the authorities.
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