The South Korean government will distribute the $15 million debt relief fund originally intended to support small businesses to cryptocurrency holders

According to DL News, an audit by the Financial Supervisory Service of South Korea found that the "New Start Fund," aimed at assisting small businesses struggling after the pandemic, provided over $15 million in debt relief to 269 individual cryptocurrency traders.

The audit case showed that an individual who received $62,350 in debt relief (a 77% reduction) held approximately $307,000 worth of cryptocurrency at the time. Shin Jin-chang, chairman of the Financial Services Commission, stated that the criteria for selecting beneficiaries will be strengthened, but acknowledged that only legal amendments can fundamentally prevent such situations. Currently, the fund operator, Korea Asset Management Corporation (KAMCO), cannot proactively check whether applicants hold crypto assets unless they voluntarily disclose it.

A proposed amendment currently under review in Congress, if passed, would authorize KAMCO to verify the holdings of unlisted stocks and crypto assets of beneficiaries without consent. In recent years, South Korea has gradually authorized tax and local government departments to check and freeze the crypto assets of citizens with unpaid taxes and fees.