South Korea's Debt Relief Fund Now Weighs Crypto Holdings

South Korea's New Start Fund, a government-backed debt relief program for low-income and heavily indebted individuals, now includes cryptocurrency assets in its eligibility review. The Financial Services Commission (FSC) said the change closes a gap where applicants could hold significant crypto value while qualifying for relief intended for those with limited means.

Applicants must disclose digital assets held on exchanges or in personal wallets. The FSC said the review treats crypto the same as other financial assets like bank deposits and real estate. Small holdings are unlikely to affect eligibility on their own, the commission said. The assessment considers crypto as one component of total assets alongside income and liabilities.

South Korea has one of the world's most active retail crypto trading populations. Excluding digital assets from the review created an inconsistency, the regulator said. The update brings crypto into line with how other financial assets are already treated in the screening process.