South Korea will tighten registration screening for virtual asset service providers, or VASPs, from Aug. 20 by extending suitability reviews to major shareholders, adding financial-soundness and internal-control tests, and requiring existing operators to re-register by Nov. 20 under amended rules. The Korea Financial Intelligence Unit and the Financial Supervisory Service outlined the revised manual at an Aug. 13 briefing in Seoul attended by about 100 people, including representatives from 28 registered VASPs and prospective operators. The updated regime expands screening beyond representatives and executives to major shareholders with substantive influence, including the largest shareholder, related parties, holders of 10% or more, and shareholders able to appoint a majority of the chief executive or board. If the largest shareholder is a corporation, the review can extend to that company's largest shareholder, representative and de facto controllers. Grounds for rejection now go beyond financial-law breaches to include fines or harsher penalties under major economic-crime laws and imprisonment or harsher criminal penalties for other non-financial crimes, with limited exceptions for major shareholders under enforcement-decree provisions. Authorities will also examine financial condition and social credit standing. Operators must also meet new financial-soundness standards, including a debt-to-equity ratio of 200% or below and no record of payment defaults that undermined credit order in the past three years. Regulators will shift legal-compliance checks from document review toward substantive verification of organization, staffing, IT systems and internal controls tied to anti-money-laundering, user protection and other legal obligations, with on-site inspections where needed. Major-shareholder changes, including updates to nationality, name, address or shareholdings, must be reported at least 30 days before the scheduled transfer date and cannot be executed until the FIU accepts the filing; carrying out a transfer beforehand may trigger registration cancellation or violations under the specified financial transaction law. The manual also clarifies that non-custodial wallet services without exclusive control over private keys are excluded from VASP registration, while businesses that custody or manage virtual assets as a business must register. Existing VASPs approved before Aug. 20 must complete supplementary registration within three months under transitional rules, though some requirements including the debt-to-equity cap have a one-year grace period. Authorities said false statements or omissions could lead to rejection or ex officio revocation, and screening of transitional registrations is set to begin on Nov. 23.