[비즈한국] Although virtual assets have come under the supervision of financial authorities following the implementation of the Virtual Asset User Protection Act, critics point out that they remain in a blind spot because they are not yet included in the assets that can be checked for deceased persons. While virtual assets, which grew outside the legal framework, have belatedly been brought under regulation, the lack of even an official industry-representative body highlights the limitations of their role as actual "financial assets."
The "One-Stop Service for Deceased Persons' Property Inquiries" (Safe Inheritance One-Stop Service) allows bereaved family members (heirs) to collectively search for a deceased person's assets if they passed away suddenly without time to organize them. Once the service is applied for, heirs can find out the status of the deceased's assets at once without having to visit each individual institution. The Ministry of the Interior and Safety launched this service in June 2015 and has been steadily increasing the types of assets that can be searched.
There are 19 types of assets that heirs can search for, including: financial transactions, national taxes, the four major social insurance schemes, local taxes, pensions (National Pension, Government Employees Pension, Private School Teachers Pension, Military Personnel Pension, and Korea Workers' Compensation & Welfare Service retirement pension), mutual aid associations (Construction Workers Mutual Aid Association, The Korean Local Administration Mutual Aid Association, Military Mutual Aid Association, Scientists and Engineers Mutual Aid Association, and The Korean Teachers' Credit Union), automobiles, fishing boats, land, and buildings. The Ministry of the Interior and Safety submitted an amendment to the regulation (Standards for Integrated Processing of Property Inquiries for Deceased Persons and Wards, etc.) on July 1 to add prepaid installment transaction products to this list.
In this process, financial transaction inquiries are handled by the Financial Supervisory Service (FSS), which provides information received from various financial companies and associations. Heirs can visit the FSS or financial institutions such as banks to apply for an inquiry and check for financial assets (deposits, insurance, etc.), debts, stocks, promissory notes, and memberships in funeral service companies under the deceased’s name. Since loans from credit lenders are also checked, virtually all financial assets are covered. Financial companies typically freeze the relevant accounts upon being notified of a deceased person's account inquiry application.
However, since virtual assets are not included in the searchable financial transaction records, heirs must check for assets separately at each exchange. The five major domestic KRW-based exchanges (Upbit, Bithumb, Coinone, Korbit, and Gopax) support account verification and asset inheritance after going through verification procedures with supporting documents (such as a family relationship certificate) when an heir requests a search for a deceased person's account. While the application process is not difficult, if the heir does not know which virtual assets the deceased held and where, they must individually apply to every single exchange to verify them.
An official from a KRW-based exchange stated, "Requests from heirs for asset inquiries occur at most 20 times a year, usually less than 10. It’s not a large number," and added, "Since the User Protection Act went into effect, there are many regulations to follow, so it would be difficult for exchanges to further strengthen personal information inquiries."
However, among the five major exchanges, Korbit has been under a contract with credit bureau Korea Credit Bureau (KCB) since April 2023 to collect information on deceased persons. According to Korbit, they only search for members who have consented to the provision of information to third parties, and if death is confirmed through KCB, they freeze the account and return the assets according to the heir’s request. Korbit only checks for a member's death when there is a suspicion that someone else has accessed the account.
Such services were established after crimes involving the hacking of virtual asset exchange accounts to steal assets occurred. Exchanges took measures to identify whether a member has passed away and freeze the account if abnormal transactions occur in abandoned accounts. In fact, in 2022, the Korbit account of the late Nexon founder Kim Jung-ju was hacked and virtual assets were stolen. The incident became known because Korbit detected the abnormal transaction and reported it directly to law enforcement authorities.
However, it remains unclear when virtual assets will be included in financial transaction inquiries. For starters, there is a long way to go, given that virtual assets are only "half" incorporated into the institutional sphere. While virtual assets are under the supervision of financial authorities through the first phase of legislation (User Protection Act), the second phase of legislation (Basic Regulation Act) that regulates the issuance, distribution, and disclosure of virtual assets has not yet been prepared.
Nevertheless, as FSS Governor Lee Bok-hyun mentioned at a meeting with the CEOs of 16 virtual asset exchanges on September 26, "We will actively discuss the second phase of the bill with policy authorities while monitoring the implementation progress of the first phase and self-regulation to resolve regulatory uncertainty," attention is focused on whether the second phase of legislation will be pursued in the 22nd National Assembly.
The lack of an institution to handle asset inquiries collectively is another task to be solved. Currently, in the virtual asset industry, the Digital Asset eXchange Alliance (DAXA), a self-regulatory body, is acting as an association. However, DAXA is funded by the membership fees of the five major KRW-based exchanges and has not even been registered as an incorporated association. As it is run by the funds of large KRW exchanges, it is difficult to be free from the influence of the exchanges, and it has the clear limitation of not being able to represent the position of other coin-only exchanges.
For this reason, the Financial Services Commission (FSC) approved the establishment of a separate foundation for user asset management on September 26. DAXA has been pushing for the establishment of a "Digital Asset Protection Foundation" to return assets of closed-down exchanges to users, and it has become possible to establish the foundation after receiving approval based on the "Rules on the Establishment and Supervision of Non-profit Corporations under the Financial Services Commission."
An industry official predicted, "Existing financial companies like banks have systems where they share information with each other, and there is a government agency that acts as a hub, but such an organization does not exist in the virtual asset market," adding, "As operation systems vary by exchange and the system is still inadequate, services like integrated asset inquiries will only be possible after more infrastructure is in place."