More than half of domestic virtual asset service providers (VASPs) face an existential crisis as they fail to meet stricter financial soundness standards set by financial authorities, specifically a "debt ratio of 200% or less" requirement that takes effect next month. Although a one-year grace period has been provided, concerns are mounting that large-scale restructuring will be inevitable amid sluggish trading conditions.

Starting August 20, following amendments to the enforcement decree of the Specific Financial Information Act (SFIA), VASPs and major shareholders must mandatorily meet the requirement of a "debt ratio of 200% or less" based on the most recent quarterly financial statements. Financial authorities have granted a one-year grace period for this standard, which extends until August 20, 2027.

Among 24 VASPs whose financial status was confirmed as of the end of last year (end of 2025), 12 have already exceeded a debt ratio of 200%. Most of these were in a state of complete capital impairment. When including four companies that were previously in a state of complete capital impairment based on quarterly standards, up to 16 companies—representing 57% of the 28 VASPs reported to the Financial Intelligence Unit (FIU)—are estimated to fail to meet the requirement, heightening crisis awareness in the industry.

However, some VASPs appear to meet the requirement when user deposits are excluded. This applies to four domestic won trading exchanges (Upbit, Bithumb, Coinone, and Digital X), four custodians including Korea Digital Asset, Korea Digital Asset Custody, Infinit Block, and Blosafe, two wallet operators including HectoWallet One and AhnLab Blockchain Company, blockchain infrastructure company DSRV Labs, and institutional financial service provider Hyperithm. Gopax is currently in a state of complete capital impairment, but is expected to resolve its debt ratio issue once past problems related to the "GoPay" incident are settled.

[Photo=Yonhapnews]

The industry diagnoses that continued virtual asset trading slump and incomplete institutional arrangements in the corporate market have made it difficult to expand revenue. Consequently, the industry sees securing external investment and improving financial structure as the only path to survival.

One company executive expressed the desperation on the ground, stating, "Without external investment, the possibility of improvement is very limited, and if we cannot secure investment, we may have to close down." The industry has raised concerns that this regulation could lead to actual business shutdowns.

Uncertainty in the industry is growing further as financial authorities have yet to clarify whether companies must cease operations immediately after the one-year grace period if they fail to meet the requirements. As institutionalization of virtual assets accelerates with the enactment of laws such as the Virtual Asset User Protection Act, uncertainty becomes even more acute.

At a time when institutionalization of the virtual asset market is in full swing, strengthened regulations and a limited one-year grace period signal major industry restructuring ahead. Realistic concerns have been raised that numerous operators could be forced to exit if they fail to secure external investment, and the industry's voice has once again been highlighted that market vitalization and soundness cannot be secured without fundamental institutional improvements such as the enactment of a Digital Assets Basic Law and opening of corporate markets. It is a time to closely monitor the financial authorities' future measures and the rapidly changing market landscape.