South Korea Tracks Crypto for Debt Relief Assessments

The New Start Fund has traditionally forgiven 60% to 80% of eligible unsecured debt. Vulnerable borrowers can qualify for forgiveness up to 90%. Under the new rules, forgiveness drops to a baseline 30% for borrowers whose repayment capacity exceeds 100%. The relief amount declines further by five to 30 percentage points as financial strength increases.

A revision to the Credit Information Act takes effect August 13, broadening access to debtor asset documentation. Government lenders will routinely obtain crypto and unlisted equity data. Penalties for misrepresenting assets or moving property before applying include termination of relief, full repayment demands, and recovery of previously forgiven amounts.

The changes are part of a wider push by South Korea to bring digital assets under formal financial supervision. Prior steps include exchange licensing rules and transaction monitoring requirements. This latest update integrates crypto directly into the government's social safety net evaluation – a move that could affect holders with large portfolios who rely on debt restructuring. The Credit Information Act revision becomes operational on August 13.