The Korea Technology Finance Corporation (KIBO) will be able to request data on debtors' assets from virtual asset service providers.
The National Assembly passed a partial amendment to the Korea Technology Finance Corporation Act on the 3rd, the assembly said. The bill was introduced by Rep. Kang Seung-kyu of the People Power Party. The amendment is designed to raise KIBO's recovery rate on indemnity claims by preventing debtors from concealing assets through cryptocurrency.
Under current law, KIBO provides guarantees for bank loans and other financing extended to small and medium-sized enterprises, venture firms and startups that have technological capability but lack collateral. When a guaranteed company fails to repay its debt and KIBO pays on its behalf, the fund exercises an indemnity claim against the company or the debtor to recover the money.
Critics have said the need to manage the fund's financial soundness is growing, as KIBO's subrogation payments have increased while its recovery performance on indemnity claims has remained weak. Debtors' assets have also diversified beyond bank deposits and real estate into holdings such as virtual assets, but virtual asset service providers were not previously among the entities KIBO could ask for data, limiting its ability to identify such assets.
The core of the amendment is the addition of virtual asset service providers to the list of entities KIBO may request data from. The bill also specifies which items of national and local tax information on taxpayers KIBO may request.
Allowing KIBO to review a broader range of information on debtors' assets, including virtual assets, is expected to speed up the identification of concealed assets and the recovery of indemnity claims. Recovered funds can then be used again as a source of guarantees for small and medium-sized enterprises, venture firms and startups.
"I hope the passage of this amendment allows the Korea Technology Finance Corporation to support small and medium-sized enterprises, venture firms and startups with growth potential on a sounder financial footing," Kang said.
