South Korea is introducing a procedure requiring virtual asset providers, including cryptocurrency exchanges, to notify authorities 30 days before any change in their major shareholders and to undergo an eligibility review. Previously, providers only had to file a report after a shareholder change; going forward, they must clear a review by the Korea Financial Intelligence Unit (FIU) before an acquisition of shares is completed.
According to a draft review of the "virtual asset provider filing manual" prepared by the FIU and the Financial Supervisory Service (FSS), obtained by The Seoul Economic Daily, financial regulators are overhauling the filing manual to align with the revised Act on Reporting and Using Specified Financial Transaction Information, along with its enforcement decree and supervisory regulations, which take effect on the 20th of this month. The draft runs to 82 pages, double the length of the previous 2024 manual of 41 pages. The expansion reflects a substantial elaboration of the review criteria for major shareholder eligibility as well as providers' financial condition, social credit standing and legal compliance systems.
The timing for filing a report on a change of major shareholders is being moved up, from within 14 days after the change to 30 days in advance. The revised version requires that when a virtual asset provider's major shareholder changes in nationality, name, address, registered legal name (real-name basis) or shareholdings, the provider must notify the FIU up to 30 days before the scheduled date of the share transfer.
Even after filing a change report, a provider cannot carry out the shareholder change until the FIU accepts it. The revised measure states that carrying out an item subject to advance change notification before receiving notice of acceptance may constitute grounds for the FIU to cancel the provider's registration on its own authority, or may amount to a violation of the specified financial information act.
