Crypto Wallet Services - VASP Registration Requirements

Published Date: January 7, 2025

Issue: Whether crypto wallet service providers must register as Virtual Asset Service ​Providers (VASPs) when offering non-custodial, free wallet services.

The Financial Services Commission has clarified that certain crypto wallet service ​providers may be exempt from VASP registration requirements under Article 2(2) of ​the Virtual Asset User Protection Act when:

1. They provide only wallet platform services without independent control over ​private keys.
2. Services are offered free of charge.
3. Users maintain exclusive control over private keys, including backup wallet ​functions.

Key Takeaway: The exemption's applicability depends on specific technical ​implementations and service features. Providers should conduct detailed analysis of ​their service models against regulatory criteria for definitive determination of their ​VASP status.

Non-compliant VASPs may face penalties of up to 5 years imprisonment or fines up to ​50 million KRW under the Specific Financial Information Act.

For specific legal advice regarding your company's VASP status and compliance ​requirements, please contact us.