South Korea requires virtual asset service providers to immediately report security incidents to financial regulatory authorities

According to Digital Asset, the Financial Services Commission of South Korea announced that it will formulate new guidelines requiring virtual asset service providers to immediately notify the Financial Supervisory Service and the Financial Security Institute upon discovering security incidents. Currently, these companies only need to report to the Korea Internet & Security Agency. Financial authorities believe that as virtual assets become increasingly intertwined with the financial industry, it is necessary to quickly convey incident information to financial regulatory bodies for investigation, information sharing, and consumer protection.

Financial authorities also plan to establish the Digital Financial Security Act, which will apply security regulations comparable to the current Electronic Financial Transactions Act to virtual asset service providers, insurance agencies, and the lending industry, which hold a large amount of customer information or could cause significant asset losses. The legislation is planned to be completed and submitted in the first quarter of 2027. In addition, South Korea will conduct comprehensive security inspections of approximately 580 financial companies, including virtual asset service providers.