- South Korea delays Credit Information Act enforcement for crypto exchanges until December 2025.
- Exchanges must manage both personal and credit data under the updated legal framework.
- Penalties during the grace period apply only for gross negligence or serious user harm.
The South Korean financial regulators have decided to delay the implementation of the Credit Information Act for virtual asset service providers (VASPs) to December 1, 2025. This comes as the crypto industry has raised concerns about more time being provided in order to implement the new requirements. The decision, made by the Financial Supervisory Service (FSS), gives crypto exchanges relief regarding what they have had to consider their responsibility under the Act.
Earlier, VASPs were subject to the rules of the Personal Information Protection Act in relation to user data. However, the Financial Services Commission (FSC) stated that data on user transactions in virtual asset exchanges falls under “credit information” as defined under Article 2 of the Credit Information Use and Protection Act. Crypto platforms are now legally subordinated to the Credit Information Act requirements and, therefore, have responsibilities regarding data similar to traditional financial institutions.
What the Credit Information Act Means for Crypto Firms
According to the Act, credit information means any information that is used to determine the creditworthiness of a person in financial transactions. Given that crypto exchanges contain huge amounts of information on user transaction details, they now qualify to fall under that category. This interpretation implies that virtual asset exchanges will be businesses that handle, store, and protect such types of information just like banks and other related financial institutions.
In order to support this approach, the FSS provided a non-action opinion in late March 2025. According to this rule, the Credit Information Act violations that took place between December 2, 2024, and December 1, 2025, will not be punishable provided they were not committed deliberately or recklessly or caused substantial damage to the users. This provides VASPs time to prepare for the update changes, update their operational processes, improve data management practices, and train their compliance personnel.
This change in regulation also requires new standards of responsibility. Some of the measures that exchanges will have to enhance include internal controls and monitoring procedures for the responsible handling of customer data. Despite temporary relief from some of the sanctions, legal measures are still in force. Therefore, service providers are advised to consider this period appropriate for the development of infrastructure and policies that can meet the requirements of the Act.
Regulatory Delay Offers Industry Time to Adapt
The crypto sector had raised an issue with the short time between when the FSC provided its legal interpretation of the ruling and the initially expected enforcement date. The one-year grace period tackles that issue, enabling businesses to plan without the threat of being penalized upon the implementation of the provisions of the act. The FSS also pointed out that this leniency does not apply when the violations are serious or have been committed intentionally.
During this period, regulators will still be directing exchanges toward full compliance. Authorities also reiterated that the non-action stance does not mean legal exemption. This ensures user protection while the industry works to shift its operations without undue disturbance. The measure reflects a balanced approach by South Korean regulators, aiming to strengthen oversight while supporting industry stability.
