Korea Considers Relaxing VASP Major Shareholder Review Rules and Entry Requirements, Exchange M&A Landscape May Shift

Odaily News – The Korea Regulatory Reform Committee has proposed amendments to the Enforcement Decree of the Act on Reporting and Use of Specific Financial Transaction Information, which would exclude minor violations from the major shareholder qualification restrictions for Virtual Asset Service Providers (VASPs). This has sparked discussions in the market regarding exchange mergers and acquisitions, new business entries, and regulatory fairness. The proposed relaxation also raises questions about the scope of authority of the Enforcement Decree.

Since June 2024, South Korea has not approved any new VASP registration applications, so changes to the major shareholder review standards could directly affect future exchange acquisitions, new market entrants, and industry consolidation. Some observers point out that the current law does not explicitly grant the Enforcement Decree the authority to establish such exemption clauses, and if adjustments are made solely through administrative orders, they may face controversy over insufficient legal basis. At present, the core of South Korea's virtual asset industry is not short-term price volatility, but rather regulatory frameworks and market structure adjustments. Whether the major shareholder review system will be relaxed, and how to balance market opening with investor protection in the future, will become key variables in the industry's development. (NATE)