South Korea plans to exclude crypto investment debt from personal bankruptcy liquidation.

Three newly established rehabilitation courts in Daejeon, Daegu, and Gwangju, South Korea, will implement new guidelines to exclude debts arising from stock or cryptocurrency investments from liquidation calculations during personal debt restructuring hearings. This move aims to reduce the total amount debtors need to repay creditors, prevent citizens from falling into personal bankruptcy, and address South Korea's growing household debt problem (household debt is projected to reach 92% of GDP by 2025). Previously, the Suwon and Busan courts had classified such investment losses as "general property" losses rather than "speculative debts." While the policy faces public criticism for potential moral hazard, the courts stated they will conduct rigorous audits to prevent any attempts to conceal assets by faking investment failures. According to data from the Seoul Rehabilitation Court, the number of related cases has increased by nearly 13% since 2023. (DL News)