South Korea to allow minor legal violations in crypto major shareholder reviews

South Korea’s Financial Services Commission said it will introduce an exception that excludes certain criminal penalties for legal violations by major shareholders of virtual asset service providers from disqualification criteria if the violation is minor or falls under joint penal provisions, according to Newsis. In written responses submitted today to the National Policy Committee of the National Assembly, the FSC said, in connection with a recommendation from the presidential Regulatory Rationalization Committee to ease major shareholder eligibility reviews, it will create exceptions to disqualification requirements for virtual asset service provider filings related to criminal punishment for legal violations by major shareholders, drawing on cases under the Capital Markets Act and the Online Investment-Linked Finance Act. The move reflects the impact of a revised enforcement decree of the Act on Reporting and Using Specified Financial Transaction Information, which is set to take effect on Aug. 20. The revision includes a significant tightening of screening standards for major shareholders of virtual asset service providers.