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South Korea Tightens Shareholder Screening Rules for Crypto Firms

South Korea’s financial regulator seeks to cap major crypto exchange shareholdings and mandate fit-and-proper reviews to prevent conflicts of interest and bolster market integrity.

Summary

South Korea's Financial Services Commission (FSC) has proposed capping major shareholders of cryptocurrency exchanges at 15%–20% and introducing mandatory fit-and-proper reviews for Virtual Asset Service Provider (VASP) major shareholders. The initiative aims to curb conflicts of interest and strengthen oversight of the crypto market. The proposal has been submitted to the National Assembly for review, continuing the government’s push for higher transparency and stricter compliance in the digital asset sector.

Terms & Concepts
  • Shareholder Screening: The process of evaluating and verifying the eligibility and background of individuals or entities holding shares in a company.
  • Cryptocurrency Business Regulation: Government rules and standards that oversee the operation, compliance, and security practices of companies dealing with digital assets.
  • Virtual Asset Service Provider (VASP): An entity that conducts activities involving digital assets, such as exchanges, transfers, or safekeeping, as defined by financial regulations.