South Korea tightens debt relief criteria to target crypto holdings

The regulatory shift forces applicants to present balance certificates from the country’s five major won-based exchanges. While these requirements began in January, they now form a core component of eligibility assessments conducted by the Korea Asset Management Corporation. Authorities argue that previous oversight allowed borrowers with significant hidden assets to qualify for excessive relief.

Beyond simple disclosure, the government is pruning the generosity of its support. Borrowers whose assessed repayment capacity exceeds 100% will see their principal reduction cut from the current 60% floor to 30%. Starting August 13, amendments to the Credit Information Act will further empower agencies to pull property data in bulk, ensuring ongoing monitoring of asset declarations even after relief has been granted. This move aligns with a broader push to modernize oversight as digital asset activity continues to surge across the local financial sector.