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South Korea Ties Debt Relief to Crypto Holdings in New Start Fund Revamp
South Korea's New Start Fund will now factor in crypto and unlisted share holdings when determining debt relief eligibility, with minimum principal reductions dropping from 60% to 30% for stronger borrowers.
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South Korea is tightening the rules for its public debt relief program, and crypto holders are now in the crosshairs.
The Financial Services Commission said after a June 25 review meeting with the Korea Asset Management Corporation (KAMCO) that it would revise the New Start Fund – a debt restructuring program for small business owners and self-employed borrowers – to strengthen property assessments, debt adjustment standards, and post-approval monitoring, local media reported.
Authorities will now examine investment assets such as cryptocurrencies and unlisted shares that were previously difficult to verify through financial statements and government administrative records. The commission said the changes aim to distribute public support more efficiently and prevent unnecessary spending.
Applicants identified as users of South Korea's five major won-based cryptocurrency exchanges have been required to submit virtual asset balance certificates since January after the government reached agreements with the exchanges. KAMCO uses the documents during property assessments to determine eligibility for debt relief.
Officials also began requiring applicants to disclose holdings of unlisted shares in May. Shares in privately held companies operated directly by the applicant remain excluded from property reviews because authorities considered the need to preserve business income.