South Korea Eases Crypto Major Shareholder Reviews for Minor Legal Violations

The Financial Services Commission (FSC) in South Korea has announced that it will introduce exceptions to disqualification criteria for major shareholders of Virtual Asset Service Providers (VASPs). This decision aims to align crypto regulations with existing financial market laws, specifically the Capital Markets Act and the Online Investment-Linked Finance Act.

The new exceptions are a response to a recommendation from the presidential Regulatory Rationalization Committee to ease major shareholder eligibility reviews. The move is particularly timely as a revised enforcement decree of the Act on Reporting and Using Specified Financial Transaction Information takes effect on August 20, potentially disqualifying individuals with even minor infractions.

The FSC's clarification provides much-needed guidance for crypto firms navigating shareholder eligibility. This change signals South Korea's ongoing effort to balance strict anti-money laundering (AML) and consumer protection measures with the need to foster a competitive crypto industry.