Why South Korea Is Raising the Bar for Crypto Exchange Licenses
South Korea tightens crypto exchange licensing, expanding AML checks on shareholders and governance for stronger oversight rules now.
South Korea has moved to strengthen control over its crypto market. Lawmakers approved changes that expand licensing checks and increase regulator authority.
The move reflects ongoing efforts to tighten oversight of digital asset businesses.
Lawmakers approve tighter licensing framework
On Thursday, lawmakers approved changes to the Act on Reporting and Using Specified Financial Transaction Information.
The amendment updates the Act on Reporting and Using Specified Financial Transaction Information. The law forms a key part of the country’s anti-money laundering system.
According to a Ledger Man post on X, South Korea has tightened crypto licensing rules for exchanges and shareholders after lawmakers approved changes to the regulatory framework.
The revision increases scrutiny across the crypto sector. It also broadens the authority of regulators.
The amended law will take effect six months after enactment. Regulators are expected to prepare guidance during this period.
Oversight will remain under the Financial Intelligence Unit and the Financial Services Commission.
Expanded scrutiny of shareholders and executives
Under the new rules, reviews will include major shareholders. Earlier checks focused mainly on executives and directors. Authorities can now examine those with controlling influence.
The list of disqualifying offenses has expanded. It includes drug crimes, tax evasion, fair trade breaches, and serious economic violations.
Breaches of crypto user protection laws are also included. The Financial Intelligence Unit has gained more discretion.
It can assess whether firms can operate responsibly. Decisions will consider past conduct and compliance records.
Related Reading: South Korea Sets Stablecoin Capital Threshold in New Crypto Bill
Conditional licenses and AML enforcement
The amendment allows conditional crypto licenses. The FIU can attach requirements to address money laundering concerns. Conditions may also focus on user protection controls.
Another provision targets former financial industry employees. If a former worker faces AML sanctions, the FIU must notify the employer. Companies must pass the notice to the individual.
Firms must keep related records. This change closes a loophole in earlier rules. Authorities said it improves accountability across the sector.
Ownership limits and exchange governance
Regulators are also reviewing ownership rules for exchanges. The Financial Services Commission has supported ownership caps. The approach aligns exchanges with securities market standards.
The proposal would limit major shareholder stakes to about 15% to 20%. Some exchanges have raised concerns. Debate has also emerged within the ruling party.
FSC Chair Lee Eog-weon addressed the issue publicly. He said exchanges should be treated as market infrastructure. His comments signal readiness for stronger governance rules.
Industry guidance and enforcement details are still pending. The FIU will finalize implementation steps. Oversight will remain under the Financial Services Commission.
The changes mark a shift in how South Korea regulates crypto businesses. Authorities aim to strengthen market discipline. The updated framework raises expectations for firms seeking licenses.
The post Why South Korea Is Raising the Bar for Crypto Exchange Licenses appeared first on Live Bitcoin News.
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