More than half of VASPs exceed 200% debt ratio, face survival threat

More than half of virtual asset service providers face a survival threat as they fail to meet a new entry regulation requiring a debt ratio of 200% or less, Yonhap reported. According to South Korea’s electronic disclosure system DART and the Small and Medium Business Status Information System on July 30, 12 of 24 operators with verifiable financial data as of the end of last year had debt ratios above 200%. Including four others whose financial statements were not disclosed but were previously in full capital impairment on a quarterly basis, as many as 16 operators are estimated to have fallen short of the debt-ratio threshold. The standard will take effect on Aug. 20 under a revised enforcement decree of the Special Financial Transactions Act, although South Korean financial authorities plan to provide a one-year preparation period. It has not yet been specified whether operators that still fail to meet the requirement afterward would have to shut down immediately.