Financial Authorities Request Strengthened Pre-Checks for Securities Firms on Virtual Asset Segregation

The financial authorities have requested securities firms to enhance pre-checks to ensure compliance with the principle of segregation of financial and virtual assets when pursuing virtual asset-related businesses. This is interpreted as a measure to prevent potential regulatory violations due to the increasing collaboration between securities firms and virtual asset exchanges. On the 30th, the Korea Financial Investment Association sent a business letter titled 'Precautions for Promoting Virtual Asset-Related Businesses' to each securities firm. This letter was delivered at the request of the Financial Supervisory Service and contains instructions for securities firms to review any conflicting elements with current policies in advance when cooperating with virtual asset exchanges. The Financial Investment Association warned that if the content of partnerships violates the principle of segregation, service provision may be restricted. According to the definition of business outsourcing, collaboration with virtual asset operators may influence regulatory judgments. Therefore, it emphasized the need for legal reviews and prior consultations with the Financial Supervisory Service before pursuing linked businesses such as MTS, HTS, and WTS. This guidance reaffirms the principle of segregation maintained since 2017 and clarifies that there is no intention to obstruct securities firms' virtual asset-related businesses. However, regulations regarding the acquisition of stakes in virtual asset operators or strategic collaborations remain unclear. The Financial Supervisory Service has requested sufficient consultations to prevent regulatory violations. The market anticipates that discussions on specific permissible scopes and review criteria will be necessary as the intersection between institutional financial companies and the virtual asset industry expands.

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