The Financial Services Commission announced that a revision bill for the Special Act on the Prevention of Loss Caused by Telecommunications-based Financial Fraud and Refund for Loss (“the Act” hereinafter) was passed by the National Assembly at the plenary session held on March 12.
Background
With vishing scams becoming more sophisticated, there is a growing number of cases in which scammers are stealing virtual assets from victims directly or using virtual assets for laundering the money stolen from victims. However, despite the fact that virtual asset exchange service providers are being exploited in such criminal activities, there was no legal foundation so far to effectively cut off the flow of criminal proceeds or provide remedies for victims.
In this regard, the revised Act establishes a regulatory foundation to close the loophole for virtual asset exchange service providers and bolster remedies for vishing related loss and damage.
Key Revision Details
First, virtual asset exchange service providers will be required to have the same level of vishing prevention and damage and loss relief measures in place as in the case with financial companies. Unlike banks or securities companies that are required by law to regularly monitor suspicious transactions activities related to vishing scams, which allow them to take preventive measures, virtual asset exchange service providers are not obligated to follow such steps under the existing regulatory framework, which prevented them from taking swift actions in response to vishing scams.
As such, the revised Act will make virtual asset exchange service providers subject to the same level of anti-vishing and damage and loss relief duty that is currently in place for financial companies. In this regard, virtual asset exchange service providers will be required to verify the purpose of virtual asset transactions, monitor suspicious transactions related to vishing scams, freeze account activities when suspected to be involved in vishing scams, and provide support through loss refunds. In addition, virtual asset exchange service providers will join the AI-based Anti-phishing Sharing and Analysis Platform (ASAP), which has been in operation since October 2025, for real-time sharing of information and data with other organizations and authorities.
Second, the type of assets qualified for receiving vishing related damage and loss relief will include virtual assets alongside the currently recognized money under the revised Act. Thus far, when virtual assets are being extorted directly by scammers, it remained difficult to provide appropriate reliefs. Providing victims with a refund for loss was also not readily made available when stolen money has been laundered into virtual assets. In this regard, the revised Act provides a regulatory ground to recognize virtual assets as an eligible type of asset for providing victims with vishing related damage and loss reliefs in all circumstances.
Third, virtual asset exchange service providers will be allowed to provide loss refunds in the form of cash (after selling virtual assets) to ensure the availability of a more convenient and effective refund process for victims if it is desired by them. If refunds were only available in the form of virtual assets, those who have had no prior experience in virtual asset transactions could face difficulties in dealing with their recovered assets. Thus, under the revised Act, virtual asset exchange service providers will be allowed to turn virtual assets into cash for providing loss refunds to victims if it is desired by them.
Anticipated Effects & Further Plan
The passage of the revised Act underscores a government-wide willingness to root out vishing scams, which take advantage of rapidly changing financial environment to steal money from citizens. Since the revised Act brings in virtual asset exchange service providers under the regulatory purview for loss prevention, this will help to boost the effectiveness of the overall anti-vishing response system. It will help to not only cut off a venue of money laundering for criminal proceeds but also provide more effective and prompt remedies for victims.
The FSC plans to work on revisions to subordinate statutes prior to the revised Act taking effect in October 2026 to ensure a seamless implementation. The FSC will continue to seek further improvement in regulations in line with the evolving nature of vishing scams to strengthen protection of financial consumers.
* Please refer to the attached PDF for details.