Revised Act on Financial Fraud and Virtual Assets Passed

FSC Korea News

Published March 12th, 2026

Detected March 18th, 2026

Summary

South Korea's Financial Services Commission announced the passage of a revised Act on Financial Fraud and Virtual Assets. The amendments require virtual asset exchange service providers to implement vishing prevention and loss relief measures similar to financial companies, and expand eligible assets for victim refunds to include virtual assets.

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What changed

The National Assembly of South Korea has passed a revision to the Special Act on the Prevention of Loss Caused by Telecommunications-based Financial Fraud and Refund for Loss, specifically addressing vishing scams involving virtual assets. The key changes mandate that virtual asset exchange service providers must implement the same level of vishing prevention and damage relief measures as traditional financial institutions. This includes verifying transaction purposes, monitoring suspicious activities, freezing accounts, and providing loss refunds. Furthermore, these providers will join the AI-based Anti-phishing Sharing and Analysis Platform (ASAP) for real-time data sharing.

These amendments aim to close regulatory loopholes that have allowed virtual assets to be exploited in criminal activities, such as money laundering and direct theft from victims. The revised Act also expands the scope of eligible assets for victim relief to include virtual assets, not just traditional currency, and allows for refunds to be provided in cash if preferred by the victim. Regulated entities, specifically virtual asset exchange service providers, must now align their operational procedures with these new requirements to prevent and mitigate losses from vishing scams.

What to do next

Virtual asset exchange service providers must implement vishing prevention and loss relief measures equivalent to financial companies.
Virtual asset exchange service providers must join the AI-based Anti-phishing Sharing and Analysis Platform (ASAP).
Update procedures to recognize virtual assets as eligible for victim loss relief and offer cash refunds where applicable.

Source document (simplified)

Press Releases

Revised Rules on Telecom-based Financial Fraud to Bolster Response against Vishing Scams Involving Virtual Assets Mar 12, 2026
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The Financial Services Commission announced that a revision bill for the Special Act on the Prevention of Loss Caused by Telecommunications-based Financial Fraud and Refund for Loss (“the Act” hereinafter) was passed by the National Assembly at the plenary session held on March 12.

Background

With vishing scams becoming more sophisticated, there is a growing number of cases in which scammers are stealing virtual assets from victims directly or using virtual assets for laundering the money stolen from victims. However, despite the fact that virtual asset exchange service providers are being exploited in such criminal activities, there was no legal foundation so far to effectively cut off the flow of criminal proceeds or provide remedies for victims.

In this regard, the revised Act establishes a regulatory foundation to close the loophole for virtual asset exchange service providers and bolster remedies for vishing related loss and damage.

Key Revision Details

First, virtual asset exchange service providers will be required to have the same level of vishing prevention and damage and loss relief measures in place as in the case with financial companies. Unlike banks or securities companies that are required by law to regularly monitor suspicious transactions activities related to vishing scams, which allow them to take preventive measures, virtual asset exchange service providers are not obligated to follow such steps under the existing regulatory framework, which prevented them from taking swift actions in response to vishing scams.

As such, the revised Act will make virtual asset exchange service providers subject to the same level of anti-vishing and damage and loss relief duty that is currently in place for financial companies. In this regard, virtual asset exchange service providers will be required to verify the purpose of virtual asset transactions, monitor suspicious transactions related to vishing scams, freeze account activities when suspected to be involved in vishing scams, and provide support through loss refunds. In addition, virtual asset exchange service providers will join the AI-based Anti-phishing Sharing and Analysis Platform (ASAP), which has been in operation since October 2025, for real-time sharing of information and data with other organizations and authorities.

Second, the type of assets qualified for receiving vishing related damage and loss relief will include virtual assets alongside the currently recognized money under the revised Act. Thus far, when virtual assets are being extorted directly by scammers, it remained difficult to provide appropriate reliefs. Providing victims with a refund for loss was also not readily made available when stolen money has been laundered into virtual assets. In this regard, the revised Act provides a regulatory ground to recognize virtual assets as an eligible type of asset for providing victims with vishing related damage and loss reliefs in all circumstances.

Third, virtual asset exchange service providers will be allowed to provide loss refunds in the form of cash (after selling virtual assets) to ensure the availability of a more convenient and effective refund process for victims if it is desired by them. If refunds were only available in the form of virtual assets, those who have had no prior experience in virtual asset transactions could face difficulties in dealing with their recovered assets. Thus, under the revised Act, virtual asset exchange service providers will be allowed to turn virtual assets into cash for providing loss refunds to victims if it is desired by them.

Anticipated Effects & Further Plan

The passage of the revised Act underscores a government-wide willingness to root out vishing scams, which take advantage of rapidly changing financial environment to steal money from citizens. Since the revised Act brings in virtual asset exchange service providers under the regulatory purview for loss prevention, this will help to boost the effectiveness of the overall anti-vishing response system. It will help to not only cut off a venue of money laundering for criminal proceeds but also provide more effective and prompt remedies for victims.

The FSC plans to work on revisions to subordinate statutes prior to the revised Act taking effect in October 2026 to ensure a seamless implementation. The FSC will continue to seek further improvement in regulations in line with the evolving nature of vishing scams to strengthen protection of financial consumers.