Gate News message, April 21 — South Korea’s Financial Services Commission (FSC) issued a legal interpretation on April 10 clarifying that financial institutions have no obligation to confirm virtual asset service provider (VASP) status for bankrupt corporate customers that no longer engage in digital asset trading activities.
According to the FSC’s Financial Information Analysis Bureau, if a customer does not conduct digital asset trading as a business activity and therefore does not qualify as a VASP under the Specific Financial Information Act (특금법), financial institutions are exempt from confirming VASP-related matters such as business registration, approval status, and segregated deposit requirements. The FSC noted that confirmation through a bankruptcy trustee can establish whether the customer has ceased digital asset operations.
However, financial institutions must conduct ongoing customer due diligence and must verify VASP registration status if the customer is later found to be engaged in virtual asset business activities. Should such activities be confirmed and the customer fails to meet regulatory requirements under the Specific Financial Information Act or Virtual Asset User Protection Act, financial institutions must terminate the business relationship.
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