South Korea Tightens Crypto Rules With New Checks on Major Shareholders

Highlights:

• South Korea is tightening crypto registration rules to improve oversight of exchanges and other digital asset businesses.
• Crypto firms will face stronger checks on owners, AML systems, staff, finances, and technology before approval.
• The new rules start August 20 and require firms to report major ownership and compliance changes earlier.

South Korea is strengthening registration rules for cryptocurrency businesses as the country prepares to bring tougher compliance requirements into force. The revised framework will increase checks on major shareholders, financial health, anti-money laundering systems, staffing, and technology infrastructure of virtual asset service providers.

The South Korean Financial Services Commission (FSC) announced the revised registration manual on August 13. The Financial Intelligence Unit (FIU) and Financial Supervisory Service (FSS) also held an industry briefing that day to explain the changes to existing and prospective crypto businesses. The revised rules will take effect on August 20.

The update follows amendments to South Korea’s Act on Reporting and Using Specified Financial Transaction Information. The law covers virtual asset service providers, commonly called VASPs. These businesses include crypto exchanges and certain companies that provide crypto custody or related services.

🚨 JUST IN: 🇰🇷 South Korea tightens crypto exchange registration rules, expanding shareholder background checks and requiring operators to notify regulators 30 days before major ownership or compliance changes. pic.twitter.com/5HqPfiKmBo

— 𝗖 𝗵 𝗶 𝗯 𝘀™ (@Sam_ko4) August 13, 2026

South Korea Expands Checks on Crypto Company Shareholders

Under the revised system, regulators will carry out wider checks before approving a crypto business. Criminal record reviews will now include major shareholders, not just company representatives and executives. Authorities will also look at economic crimes and other legal violations. In addition, they will review the financial condition and credibility of the company, its shareholders, executives, and other people covered by the rules. 

Crypto businesses will have to provide more detailed information about their ownership structure. This includes the identity, nationality, and shareholdings of relevant major shareholders. Companies with overseas owners or complicated corporate structures may need additional documents to show who ultimately controls the business.

The FSC said the stricter rules reflect the rapid growth of South Korea’s crypto market. The number of users able to trade rose from about 5.58 million at the end of 2021 to 11.13 million at the end of last year. However, the figures may include the same users registered on more than one exchange.

South Korea Sets Clearer AML and Technology Rules for Crypto Firms

The revised manual also sets clearer standards for anti-money laundering, or AML, systems. Crypto businesses will generally need at least four employees working on AML duties. Regulators will also review the professional experience, training, or relevant qualifications of compliance officers.

Technology requirements have also been clarified. Computer systems that process unique identification information or personal credit information must be located in South Korea. Companies using cloud services can meet the requirement when the relevant servers are hosted in a Korean region. Authorities may also conduct on-site inspections to check whether compliance systems are actually operating as described in registration documents.

Crypto Firms Must Report Major Changes Before They Take Effect

Another major change affects updates to ownership and compliance systems. Businesses previously had 14 days after certain changes to report them. Under the revised framework, changes involving major shareholders or regulatory compliance systems must generally be reported 30 days in advance.

The manual also provides clearer guidance for non-custodial crypto wallets. A wallet provider may fall outside VASP registration requirements when it does not have exclusive control over users’ private keys. Regulators will consider factors such as whether the company can independently transfer assets or access private keys.

The country also broadened its Travel Rule on cryptocurrency to include all transfers between any registered exchanges. This is in addition to its efforts to regulate digital assets transactions. 

South Korea eliminates the 1M won Travel Rule threshold, applying information-sharing for all transfers between registered crypto service providers. This could boost compliance-driven flow and reduce anonymity risks in regional markets. $BTC $ETH pic.twitter.com/2PCZ63xWcB

— Bpay News (@bpaynews) August 11, 2026