The Financial Services Commission announced that a revision bill for the Act on Reporting and Using Specified Financial Transaction Information (“the Act“ hereinafter) passed the plenary session of the National Assembly on January 29. The revision is intended to strengthen entry rules for virtual asset service providers and allow the notification of sanctions imposed on former (retired) employees of financial companies.

Key Revision Details

a) Strengthening of entry rules for virtual asset service providers

With the revised law in place, the rules concerning the market entry of virtual asset service providers have been strengthened. More specifically, the revised law authorizes the Korea Financial Intelligence Unit (KoFIU) to check criminal record on major shareholders when screening for the registration of a virtual asset service provider. Previously, only the chief executive and other executive officers were subject to criminal background check. Under the revised law, the scope of laws under which previous rule-breaking activities are screened for will also be broadened to include violations regarding illegal narcotics trafficking, fair trade, tax offenses, specific economic crimes, virtual asset user protection, etc.

Additionally, the revised law will enable the KoFIU to examine financial conditions and social credibility of virtual asset service providers and whether they are equipped with appropriate levels of organizational, human resources, computer network, and internal control capacities for complying with relevant regulations.

Moreover, even after granting an approval of business registration, the revised law establishes a ground for the KoFIU to impose certain conditions for the purpose of ensuring anti-money laundering, user protection, etc.

b) Notification of sanctions imposed on retired employees of financial companies

The revised law also includes a provision authorizing the KoFIU to notify financial companies about the issuance of sanctions imposed on their former (retired) employees for violation of the Act. Upon receiving a notification of sanctions being imposed on former (retired) employees, financial companies should notify this fact to the former (retired) employees and maintain a record of sanctions notification.

Expectation & Further Plan

The revised law will help to more effectively prevent the entry of unqualified business entities into the virtual asset market, thereby helping to establish a more orderly market environment and ensure protection for users.

Moreover, the updated regulatory provision enabling the KoFIU to notify financial companies about sanctions being imposed on retired employees will help to further strengthen the effectiveness of sanctions.

The revised law will take effect six months after promulgation (expected to be from August 2026). Meanwhile, the KoFIU plans to work on updating subordinate statutes in line with the revised law to make sure a seamless implementation of the changed rules.

* Please refer to the attached PDF for details.