South Korea has begun operating three new rehabilitation courts in Daejeon, Daegu, and Gwangju, introducing a landmark policy that excludes debts tied to cryptocurrency and stock investments from personal rehabilitation repayment calculations. The courts, which opened in March 2026, mark a significant expansion of the country’s specialized insolvency network and offer substantial relief to individuals who borrowed money to trade digital assets and equities, only to suffer losses.

Under the new framework, debtors who took out loans to invest in crypto and subsequently lost money can have those amounts set aside when a court designs a repayment plan. Rather than counting investment losses as ongoing liabilities, judges will focus on the…