Lawmakers and watchdogs pushed for tighter governance, including possible ownership caps for crypto exchanges.
Stricter South Korea crypto licensing rules could make operations more difficult for digital-asset firms. Lawmakers widened checks to cover controlling shareholders and company controls. Regulators said the overhaul targeted money-laundering and user-protection risks in local markets.
The National Assembly approved an amendment to the Act on Reporting and Using Specified Financial Transaction Information. The move tightened market access for virtual asset service providers. The updated framework brought broader discretion for the Financial Intelligence Unit.
Lawmakers expanded background checks for firms seeking local operating approval. Regulators reviewed executives and major shareholders under the amended law. The latest crypto news reveals that the Act formed part of South Korea’s Anti-Money Laundering framework.
The new red flags covered more than financial crimes, lawmakers said. Regulators added drug trafficking, tax evasion, and fair-trade violations. Lawmakers also added serious economic crimes and user-protection law breaches.
The amendment broadened what regulators assessed during licensing decisions. The Financial Intelligence Unit reviewed finances, internal controls, and legal track records. The agency also judged overall credibility when granting approvals.
Lawmakers passed the committee substitute bill in a plenary session. The National Assembly said the changes took effect six months after enactment. Regulators planned implementation guidance before the start date.
The amendment widened the Financial Intelligence Unit’s licensing authority, lawmakers said. This agency gained discretion to weigh operational readiness and compliance culture. The Financial Services Commission oversaw the process after approval.
Regulators also gained the power to grant conditional operating approvals. The Financial Intelligence Unit imposed requirements aimed at money-laundering and user-protection risks. These rules allowed firms to address gaps under formal supervision.
The law also closed a loophole tied to former finance-industry employees. The Financial Intelligence Unit had to notify a firm’s chief executive. Companies had to relay notices to sanctioned former employees and keep records.
Lawmakers framed the change as a compliance reporting fix. The rule targeted cases where individuals faced sanctions for Anti-Money Laundering breaches. It placed recordkeeping duties on businesses, not regulators.
The National Assembly described the bill as a core update to oversight. The measure broadened vetting beyond individuals to governance structures. Regulators treated internal controls as part of market access decisions.
South Korea’s financial watchdog backed ownership limits for exchanges on Wednesday. Financial Services Commission Chair Lee Eog-weon said exchanges resembled market infrastructure. Lee said regulators should align exchange governance with securities markets, and top crypto news platfroms covered it.
Regulators reviewed a proposal to cap major shareholders’ stakes. The cap ranged between about 15% and 20%, officials said. The proposal drew pushback from operators and concerns inside the ruling party.
Lee’s comments signaled regulatory appetite for tighter governance controls. Officials linked ownership limits to broader plans under the proposed Digital Asset Basic Act. Regulators weighed exchange influence over market operations and consumer protection.
The article described the ownership cap as part of an ongoing review. Officials discussed governance alignment rather than business restriction, Lee said. Regulators treated exchange ownership concentration as a structural risk.
The tightened licensing framework and governance debate moved in parallel. Lawmakers focused on entry requirements and shareholder screening. The watchdog focused on the ongoing ownership structure after market entry.
Regulators prepared industry guidance ahead of implementation, lawmakers said. The Financial Intelligence Unit drafted details under the Financial Services Commission oversight. Firms faced a six-month runway before the law applied.
The new South Korea crypto licensing rules raised barriers for new entrants. Shareholders faced expanded review and wider disqualifying offense categories. Firms also faced deeper scrutiny of finances and internal control systems.
Conditional approvals created a path for firms with remediable compliance gaps. The Financial Intelligence Unit could attach requirements linked to Anti-Money Laundering and user protection. Exchanges and applicants faced tighter timelines and documentation demands, as per the latest crypto news.
Ownership-cap discussions added a near-term governance pressure point. Officials reviewed limits near 15% to 20% for major shareholders. Regulators signaled tougher alignment with securities-style infrastructure oversight.
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