New Leap Fund's Blind Spot: Failing to Check Crypto Holdings
South Korea's New Leap Fund has been criticized for failing to review applicants' crypto holdings, potentially allowing debtors with means to repay to receive debt relief.
The program, aimed at helping long-term delinquents get back on their feet, does not conduct checks on virtual assets despite revisions to the Credit Information Act that allow government agencies to access crypto-related information without a debtor's consent.
Kamco, which manages the New Leap Fund, claims it uncovers concealed assets through post-review reporting and can claw back forgiven amounts or seek damages if additional assets are identified. However, authorities have already found multiple cases of applicants hiding crypto holdings under similar debt-adjustment programs.
A 2022 audit by the Board of Audit and Inspection found that one borrower holding about 430 million won ($311,000) in virtual assets received debt relief of 120 million won ($86,900). The total amount of debt forgiven came to 22.5 billion won ($16.3 million).