South Korea's Crypto Industry Faces Debt Crisis as 200% Rule Takes Effect

The South Korean crypto industry is bracing for a debt crisis as a new regulatory rule takes effect. From August 20, virtual asset service providers (VASPs) will be required to maintain a debt ratio of 200% or less, meaning their total liabilities cannot exceed twice their shareholder equity.

A report by Yonhap News Agency found that 12 out of 24 operators with verifiable financial data had debt ratios above 200%. Including four others with previously disclosed capital impairment, up to 16 operators, or roughly two-thirds of the market, are estimated to be non-compliant.

Financial authorities have indicated they will provide a one-year preparation period before full enforcement. However, it has not yet been specified what actions will be taken against operators that still fail to meet the requirement after the grace period.