South Korea's Special Financial Law Amendment on Virtual Assets Approved by the Administrative Council and Subject to Pass by Judiciary Committee and Parliament Plenary

This morning, the Korean Financial Services Commission (FSC) stated that the Korean Parliament ’s Administrative Committee approved yesterday (the “Reporting and Utilization of Information on Certain Financial Transactions (Special Financial Law)” amendment (may Change), which means that South Korean virtual assets have taken an important step in the process of institutionalization. It is reported that the amendment includes some implementation standards recommended by the International Anti-Money Laundering Organization (FATF), such as: 1. Definition of cryptocurrency-related enterprises as "virtual asset operators (VASP)"; 2. Virtual asset operators must comply with the operators Business, such as reporting to a financial institution (FIU) (undeclared operating companies will be sentenced to 5 years in prison and 50 million won fines), anti-money laundering obligations (customer confirmation and suspicious transaction reports, etc.) and additional obligations; 3. Financial companies trading with virtual asset operators are required to observe the following obligations: check the representative of the operator and the purpose of the transaction, check whether the operator submits a declaration, and whether the funds are managed separately. In addition, taking into account the adaptability and preparation time of the regulations, if the amendment can be finally approved by the Legal Judiciary Committee and the Plenary Session of Congress, it is expected to be implemented one year after its promulgation.