Fintech 2026

SOUTH KOREA Law and Practice Contributed by: Jongbaek Park, Seungil Hong, Seyeong Im and Eric Jeong, Bae, Kim & Lee LLC

under the AML Act. New fintech players such as VASPs and P2P lending platform operators are also considered financial companies for the purposes of these regulations. In addition, a fintech provider can be subject to further specific obligations under the regulations applicable to the fintech provider depending on its business model, the steps it takes to prevent illegal activities and ensure cybersecurity, and the due diligence it car - ries out on customers’ suitability. 2.10 Significant Enforcement Actions As the importance of anti-money laundering compli - ance grows, the Financial Intelligence Unit (the “FIU”) under the FSC has adopted a strict enforcement stance. In December 2025, the FIU fined a domestic exchange approximately KRW35.2 billion for violations of KYC- related obligations. In addition, in January 2026, the FIU issued an institutional warning to another domes - tic exchange and imposed a fine of approximately KRW2.7 billion for violation of KYC-related obliga - tions. 2.11 Implications of Additional, Non- Financial Services Regulations Personal data protection in Korea is governed by the PIPA. Meanwhile, the handling of credit information is regulated by the CIUPA. These laws apply to all financial institutions, including legacy players. Financial security requirements are specifically addressed in the EFTA. The provisions of the EFTA apply to financial institutions (legacy players) and registered electronic financial business operators. However, fintech companies that operate without a financial licence are not subject to the security-related obligations under the EFTA. 2.12 Review of Industry Participants by Parties Other Than Regulators As well as regulators such as the FSC, the FSS and the KRX, there are self-regulatory organisations in par - ticular industries such as the following:

• the Korea Financial Investment Association, which was established under the FSCMA to be in charge of imposing self-regulations, registering and managing the professional workforce, conduct - ing preliminary reviews of certain over-the-counter derivative products, and providing financial invest - ment business-related training to protect investors and promote sound business operations among members of the Association; • the Specialised Credit Financial Business Associa - tion, which was established under the Specialised Credit Finance Business Act and is responsible for recommending improvements to business opera - tion methods for members, reviewing the adver - tisements of specialised credit financial compa - nies, and publication and amendment of industry standard terms and conditions; • the Insurance Association, which was established under the Insurance Business Act and is responsi - ble for the determination of regulations on entrust - ment to insurance agents, the comparison and disclosure of insurance products and publication, and amendment of the rules required to be com - plied with by insurance companies; and • the Digital Asset Exchange Alliance (DAXA), which is a non-statutory consultative body formed by major Korean virtual asset exchanges, operates as an industry-led self-regulatory participant, devel - oping and applying common standards such as joint policies on the listing, trading and delisting of virtual assets, and anti-money laundering and other compliance-related policies in line with regulatory expectations. 2.13 Conjunction of Unregulated and Regulated Products and Services Companies engaging in financial services under the requisite licence are usually restricted in terms of their business scope and activities. If a licensed financial service company intends to provide any unregulated products or services that do not fall within the scope of the financial licence held, the company will have to file a report in advance to the financial regulators, who have certain discretion in this matter, unless specifi - cally permitted under the relevant regulations. For example, there is no law regulating non-fungible tokens (NFTs), and NFT transactions can be brokered

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