Summary
- The Financial Services Commission said it approved revisions to the enforcement decree of the Act on Reporting and Use of Specific Financial Transaction Information, allowing Naver’s Fair Trade Act violation to be treated as an exception in Dunamu’s major-shareholder eligibility review for a virtual-asset business.
- The revision lowers the chance that Dunamu’s virtual-asset business registration would be rejected solely because of Naver’s record of violating the Fair Trade Act, while the FIU will decide whether the exception applies.
- Under the revision, the travel rule will be expanded to all virtual-asset transfer transactions, while restrictions on transactions involving overseas exchanges and personal wallets and a suspicious-transaction monitoring framework for transactions worth 10 million won ($7,200) or more will also be applied.
South Korea has created an exception in the major-shareholder eligibility review for virtual-asset businesses, easing one of the obstacles to a potential merger between Naver Corp. and Dunamu Inc. The change reduces uncertainty over whether Naver’s past Fair Trade Act violation could affect Dunamu’s review.
The Financial Services Commission said on Aug. 11 that the Cabinet approved revisions to the enforcement decree of the Act on Reporting and Use of Specific Financial Transaction Information. Under the revised rules, a major shareholder of a virtual-asset business may be excluded from disqualification even after receiving criminal punishment for violating the Fair Trade Act or other related laws if the penalty was imposed under a joint penal provision or if the Korea Financial Intelligence Unit determines the violation was minor. The amendment reflects an earlier recommendation from the Regulatory Reform Committee.
The revision had been a key variable in the proposed Naver-Dunamu merger. Naver was fined in a first-instance court ruling for violating the Fair Trade Act in connection with its real-estate platform. Because Naver is the controlling shareholder of Naver Financial Corp., which would become a major shareholder of Dunamu, the company’s record had raised concerns in the eligibility review after the revised decree takes effect.
The original enforcement decree draft did not include an exception allowing regulators to consider the severity of a violation, but the provision was added during the review process. That makes it less likely that Dunamu’s registration as a virtual-asset service provider would be rejected solely because of Naver’s Fair Trade Act violation. The FIU will decide whether the exception applies. The rules take effect on Aug. 20.
The revision also strengthens regulation of virtual-asset transfers. The travel rule, which requires the provision of sender and recipient information, will be expanded to all virtual-asset transfer transactions. Transactions involving overseas exchanges and personal wallets will be restricted according to risk, and deals worth 10 million won ($7,200) or more will be subject to a separate suspicious-transaction monitoring framework.
Cho Mi-hyun, Hankyung.com reporter [email protected]
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