South Korea’s Financial Services Commission has announced significant revisions to the New Start Fund, a public debt restructuring program for small business owners and the self‑employed. On June 25, after a review meeting with the Korea Asset Management Corporation (KAMCO), the commission confirmed that cryptocurrency holdings will now be formally included in applicant property assessments.
Since January, users of the country’s five major won-based exchanges have been required to submit virtual asset balance certificates during their applications. KAMCO uses these documents to evaluate the scope of an applicant’s liabilities and determine eligibility for debt forgiveness. The new rules also add unlisted shares to the scope of mandatory disclosure, a measure that began in May.
The overhaul ties debt relief more closely to repayment capacity. Under the current framework, unsecured debt delinquent for over 90 days can receive principal reductions of 60–80%, with vulnerable groups eligible for up to 90%. The commission found that this high floor limited the ability to differentiate borrowers.
Applicants whose repayment capacity exceeds 100% will now face a minimum principal reduction of only 30% instead of 60%. Authorities can lower relief by 5 to 30 percentage points depending on how much a borrower can repay. The aim is to distribute public support more efficiently and prevent unnecessary spending.
The amended Credit Information Act, effective August 13, will give government debt‑restructuring agencies bulk access to debtor property records. KAMCO will routinely receive cryptocurrency and unlisted share data from relevant institutions, enabling it to verify asset declarations even after debt relief has been granted. A dedicated asset investigation team, in place since February, will intensify checks on suspicious pre‑application transfers—including gifts, real estate sales, and presale rights. False declarations can lead to contract termination, demands for repayment, or recovery of previously forgiven debt.
Beyond the New Start Fund, South Korea has introduced several digital‑asset policy measures this month. The Financial Services Commission proposed expanding its regulatory sandbox to cover digital asset laws, while the government approved a licensing framework for cross‑border virtual asset transfers that will take effect in December. These changes align with a broader trend: cryptocurrency‑based overseas remittances surged 380% over the past three years as banks and fintech firms continue to develop blockchain‑based payment infrastructure.
