Korea VASP Major Shareholder Changes: 30-Day Prior Reporting Requirement
Foreign investors acquiring shares in a Korean virtual asset service provider (“VASP”) should now consider regulatory reporting requirements before determining the closing date of the transaction.
Under the amendments to Korea’s Specified Financial Transaction Information Act, effective August 20, 2026, major shareholders become subject to expanded reporting and screening requirements. Changes relating to major shareholders will also shift from post-change reporting to a prior report generally required 30 days before the change.
1. Who Qualifies as a Major Shareholder of a Korean VASP?
A major shareholder is not determined solely by a shareholder’s ownership percentage.
Under the amended Act, major shareholders include the largest shareholder and principal shareholders. A principal shareholder may include a person who:
- owns at least 10% of the VASP’s voting shares;
- alone or together with others appoints the representative director or a majority of directors; or
- exercises substantial influence over major management decisions or business operations.
Certain shareholders who are related parties of the largest shareholder may also fall within the reporting scope.
Where the largest shareholder is a corporation, persons further up the ownership chain, including certain controlling persons and representatives of that corporate shareholder, may also need to be identified.
2. When Is a Major Shareholder Change Report Required?
From August 20, 2026, changes involving a VASP’s major shareholders are subject to prior reporting, generally 30 days before the proposed change.
Previously, relevant changes were generally reported after the event within the applicable reporting period. Under the revised framework, major shareholder changes and changes to the VASP’s compliance framework are treated as prior-reporting matters.
This means that a share acquisition or investment should be reviewed not only from a contractual perspective but also based on:
- the proposed signing date;
- the filing date;
- the anticipated regulatory review period;
- the closing date; and
- the date on which the actual ownership or control change occurs.
A transaction timetable that does not account for the reporting process may create regulatory risk.
3. What Types of Transactions May Trigger a Major Shareholder Review?
A major shareholder change should be considered where a transaction changes the VASP’s ownership or control structure.
Examples include:
- an investor acquiring 10% or more of the voting shares;
- a share purchase resulting in a new largest shareholder;
- changes among existing shareholders that alter the largest shareholder;
- an acquisition of rights that gives an investor substantial influence over management; and
- a change in the upstream ownership structure of a corporate major shareholder.
Accordingly, an investment below 10% does not automatically fall outside the scope of review. Governance rights, director appointment rights, shareholder agreements and other arrangements affecting actual control should also be considered.
4. What Will Be Reviewed in Relation to a Major Shareholder?
The amended framework expands regulatory review to include a major shareholder’s legal compliance history, financial condition and social creditworthiness.
The filing may require information concerning the major shareholder’s:
- identity and nationality;
- shareholding and ownership interests;
- relationship with the largest shareholder and related parties;
- relevant legal violation or criminal history;
- financial condition; and
- matters relevant to social creditworthiness.
The scope of laws considered in the screening process has also been expanded to cover additional economic crime and virtual asset-related legislation, including corresponding foreign laws in certain cases.
For foreign investors, this means that regulatory due diligence may need to extend beyond the Korean VASP itself.
5. What If the Largest Shareholder Is a Foreign Corporation?
The analysis may extend beyond the entity directly holding the shares of the Korean VASP.
Where the largest shareholder is a corporation, certain persons exercising substantial influence over that corporation, as well as its representative and other persons prescribed by law, may fall within the reporting scope.
The Korean Financial Services Commission has also noted that where ownership extends through multiple corporate entities or where a major shareholder is located overseas, obtaining the required documentation may take considerable time.
Foreign investors should therefore identify the relevant upstream ownership and control structure before setting a fixed transaction closing date.
6. Do Existing Korean VASPs Need to Take Action?
Yes. Existing registered VASPs should also review their shareholder and control structures under the amended regime.
The transitional provisions require VASPs that were already registered when the amended Act takes effect to file under the revised Article 7 requirements within three months from the effective date.
Existing VASPs should therefore review:
- their current largest shareholder;
- shareholders holding 10% or more of voting shares;
- related-party holdings;
- shareholders exercising substantial management influence; and
- relevant upstream ownership where the largest shareholder is a corporate entity.
7. What Happens If the Prior Reporting Requirement Is Not Followed?
A major shareholder change should not be treated as a routine post-closing filing.
The FSC has specifically cautioned that implementing a change subject to prior reporting before receiving notice that the report has been accepted may constitute a violation and may result in criminal or administrative sanctions.
Failure to submit a required change report, or submitting a false or otherwise improper change report, may also result in criminal penalties under the Act.
For this reason, the regulatory filing and acceptance process should be incorporated into the transaction structure before closing.
8. What Should Foreign Investors Check Before Investing in a Korean VASP?
Before acquiring shares or control of a Korean VASP, the parties should review the following matters:
- post-transaction voting ownership;
- whether related-party holdings need to be aggregated;
- whether the investor will become the largest or a principal shareholder;
- director appointment and other governance rights;
- the ownership structure above any corporate shareholder;
- major shareholder screening issues;
- documents required from overseas shareholders; and
- the relationship between regulatory filing and transaction closing.
Where a prior report is required, the transaction documents should also address whether acceptance of the regulatory filing will be a condition precedent to closing, the parties’ cooperation obligations and the consequences of delay or non-acceptance.
9. Frequently Asked Questions
Q1. Does an investor holding less than 10% fall outside the major shareholder rules?
Not necessarily. Even below the 10% threshold, a shareholder may fall within the scope of a principal shareholder if it exercises substantial influence over major management decisions or business operations.
Q2. Can the parties sign a share purchase agreement before filing the major shareholder change report?
Signing and the actual change in ownership or control should be distinguished. The key issue is that a change subject to prior reporting should not be implemented before the required reporting and acceptance process is completed.
For this reason, the regulatory process should be reflected in the closing conditions and transaction timetable.
Q3. Are overseas corporate shareholders also subject to review?
Yes. Where the largest shareholder is a foreign corporation, the analysis may extend to its upstream ownership and controlling persons. Relevant corporate and ownership documents should therefore be prepared in advance.
10. Key Takeaways
Effective August 20, 2026, changes relating to a Korean VASP’s major shareholders are generally subject to a 30-day prior reporting requirement.
The analysis is not limited to a 10% ownership threshold. Changes involving the largest shareholder, substantial management influence or an upstream corporate ownership structure may also require review.
Foreign investors considering an investment, share acquisition or M&A transaction involving a Korean VASP should therefore assess the major shareholder status, reporting requirements and transaction timeline before closing.
