South Korea Eases Crypto Major Shareholder Rules

The South Korean Financial Services Commission (FSC) has announced plans to introduce exceptions to disqualification criteria for major shareholders of virtual asset service providers (VASPs). Specifically, minor legal violations or those arising under joint penal provisions will be exempted. This move aims to align crypto sector regulations with existing financial market laws.

The decision comes in response to a recommendation from the presidential Regulatory Rationalization Committee to ease major shareholder eligibility reviews. The new exceptions will mirror practices already established under the Capital Markets Act and the Online Investment-Linked Finance Act, ensuring consistency across financial sectors.

For cryptocurrency exchanges and other VASPs operating in South Korea, this regulatory nuance is critical. Major shareholders now face a more transparent and proportionate review process, where only significant legal violations will lead to disqualification. This could encourage investment and stability in the sector, as investors gain clearer expectations about regulatory hurdles.