BitGo South Korea is registered with VASP before new regulations take effect

BitGo's Korean subsidiary obtained VASP registration, becoming the first local entity of an overseas crypto company to directly complete the process.

The Korea Financial Intelligence Unit (FIU) accepted BitGo Korea's virtual asset service provider (VASP) registration application on August 18. BitGo Korea plans to provide custody and transfer services to institutions and businesses. Asiana Financial Group holds 25% of the company, while SK Telecom holds 10%. The stricter VASP and major shareholder registration review took effect on August 20.

According to reports on August 20, the Financial Intelligence Unit of the Korea Financial Services Commission officially accepted BitGo's application for registration as a virtual asset service provider in South Korea two days ago. BitGo South Korea was founded in 2024 and chose to meet the country's regulatory requirements through its own entity rather than acquire a company that already holds a VASP registration.

BitGo South Korea plans to provide institutional custody services

The company plans to use this registration to establish cryptocurrency custody and transfer services in South Korea. BitGo said its local business will focus on financial institutions and corporate customers, but did not announce a specific launch date. The announcement also did not mention the details of the assets supported by the service, custody fees and insurance coverage, nor did it disclose specific customer information or the size of assets expected to be custody through Korean entities.

BitGo CEO Mike Belshe described the registration as an important step in the company's plan to build regulated infrastructure in key markets. "We will focus on connecting global virtual asset infrastructure to the Korean market," he said. The report pointed out for the first time that this is a South Korean subsidiary of an overseas virtual asset company that directly obtained VASP registration. However, BitGo's announcement did not make it clear that it was the first foreign-related encryption company legally operating in South Korea.

South Korea views VASP approval as a registration rather than a general financial services license. The registration allows BitGo South Korea to carry out its stated custody and transfer business, but the announcement did not state whether the company could operate a Korean won based retail cryptocurrency exchange.

Asiana and SK Telecom hold shares in BitGo in South Korea

BitGo's entry is supported by two large South Korean companies. Asiana Financial Group acquired a 25% stake in BitGo Korea in 2024, while SK Telecom purchased a 10% stake and joined the joint venture as a strategic partner. Previous reports mentioned that Asiana Bank plans to invest approximately 930 billion won (approximately 670 million US dollars) in Upbit operator Dunamu, and pointed out that Asiana and SK Telecom have assisted in the establishment of BitGo Korea as part of the bank's activities in the digital asset field.

Asiana Bank has been cooperating with BitGo to develop cryptocurrency custody services since 2023. Under subsequent ownership arrangements, Asiana is expected to contribute its experience in the financial sector, while SK Telecom provides knowledge related to authentication, identity verification and security. In addition to its investment in BitGo, Asiana has also participated in other crypto-related projects, such as cooperation with Standard Chartered Bank on tokenized deposits, stablecoins, custody and payment infrastructure.

BitGo had said in 2024 that its Korean partners would help develop institutional markets for digital assets. The latest announcement did not state whether Asiana, SK Telecom or their subsidiaries would become paying customers for the newly registered business.

BitGo follows a regulated custody path in South Korea and the United States

BitGo was established in the United States in 2013 and provides custody, wallet, trading, settlement, pledge and other digital asset services through entities in multiple jurisdictions. In Europe, BitGo holds authorization issued by the German Federal Financial Supervisory Authority under the Cryptoasset Market Framework. According to the company's licensing information, its other regulated entities include operations in Singapore, Dubai, Denmark and Switzerland.

For U.S. institutions, BitGo's Korean registration is different from the previous independent federal bank approval process. It was previously reported that BitGo had received full approval from the Office of the Comptroller of the Currency to convert its state-chartered trust company into a National Trust Bank. National Trust Bank can provide custody, trust and approved asset service functions under federal supervision, but does not operate like traditional commercial banks that absorb ordinary insurance deposits and issue regular consumer loans.

BitGo stated on its website that BitGo Bank & Trust, National Association is regulated by the OCC. The company also warned that digital assets in custody are not protected by Federal Deposit Insurance Corporation or Securities Investor Protection Corporation insurance. Therefore, this Korean registration does not extend the relevant protection or authority of BitGo's U.S. regulated entities. Services provided in South Korea will remain subject to local rules, customer qualification requirements and the authority of South Korean regulators.

South Korea tightens VASP registration review

BitGo South Korea's approval comes as stricter entry barriers take effect on August 20. The Financial Services Commission said the revised rules would extend regulatory review to VASP's CEO or controlling shareholder. When a company is the largest shareholder, the FIU may also review the company's major shareholders and representatives. BitGo South Korea's shareholder structure includes Asiana Financial and SK Telecom, but neither the FSC nor BitGo said whether the new rules will apply to applications accepted on August 18.

Under the updated framework, applicants must maintain a debt ratio of no more than 200% and must not default in the past three years. Applications may also be rejected if a company has previously been declared an insolvent financial institution or has its registration or business license revoked due to violations of financial regulations. Executives must meet the qualification requirements set out in South Korea's financial corporate governance rules. The FSC stated that applicants also need to be equipped with appropriate personnel, cybersecurity systems, physical infrastructure, and internal control mechanisms covering anti- money laundering responsibilities and customer protection.

South Korea has previously taken action against overseas platforms that serve local users without registration. In January this year, restrictions on the Google Play Store required that cryptocurrency exchanges and wallet apps targeted at Korean users must present accepted VASP declaration certificates before they can continue to be provided in the local app store. Under another part of the revised framework, transfer controls will be stricter. The FSC said South Korea will cancel the existing 1 million won threshold for travel rules inspection between registered VASPs in China, requiring all transfers of amounts to be accompanied by sender information.

Transfers involving foreign exchanges or personal wallet providers will be made subject to risk-based conditions. Six months after the new regulations were promulgated, registered providers must also report transactions involving transfers of more than 100,000 won to overseas VASP or wallet services to FIU, regardless of the assessed transaction risk.