South Korea Gives Crypto Exchanges 7-Day Clock for Customer Holdings Disclosure

South Korea is proposing new rules that would require crypto exchanges to disclose customer holdings within seven days of receiving a court order. This comes as part of the country's effort to formalize its approach to civil debt enforcement in the crypto market.

The proposed amendments to the Civil Execution Rules, which are set to take effect on October 1, aim to create a standardized process for creditors to freeze and liquidate virtual assets held by debtors. This would include requiring exchanges to identify and disclose assets held by customers who have been served with a court order.

According to the proposal, once an exchange is served with a court order, it would have one week to state whether it recognizes the debtor's claim, identify the type and quantity of assets, and disclose competing seizures. This could be particularly challenging for exchanges, which would need to balance their obligations under the new rules with their existing anti-money laundering requirements.

The proposal has significant implications for South Korea's crypto market, which is one of the most retail-heavy in the world. As of February 2025, nearly 16 million people held accounts across South Korea's five largest exchanges, equivalent to around 32% of the population.