South Korea is set to strengthen oversight of cross-border virtual asset trading, including cryptocurrency, with revised regulations slated for enactment by late 2025, according to reports.
The government aims to revise the Foreign Exchange Transactions Act in collaboration with relevant agencies, intending to curb illegal activities tied to virtual assets as cross-border transactions continue to rise, according to the Ministry of Economy and Finance.
The decision comes amid growing concerns over tax evasion and money laundering linked to virtual assets.
Data from the Korea Customs Service indicate that foreign exchange-related crimes have reached 11 trillion won ($8 billion) from 2020 to July this year, with virtual asset-related cases accounting for approximately 9 trillion won, or 80% of the total.
Currently, authorities face challenges in monitoring virtual asset transactions. Both the National Tax Service and the Korea Customs Service must seek case-by-case approval or warrants to investigate specific transactions due to an absence of a standardized monitoring system.
The planned revision seeks to address this by implementing stricter compliance requirements for virtual asset service providers engaged in cross-border trading.
Under the proposed framework, virtual asset service providers, including cryptocurrency exchanges, will be required to register with government authorities before conducting international transactions.
They will also be mandated to submit monthly transaction reports to the Bank of Korea, which shares oversight responsibilities with the Finance Ministry on foreign exchange activities.
These reports will include key transaction details, such as the date, amount, type of asset, and identifying information about both senders and recipients, facilitating broader monitoring for illegal transactions and supporting statistical analysis.
The new regulations do not signal an endorsement of virtual asset trading but are intended to build an infrastructure for oversight, ensuring regulatory compliance in cross-border exchanges.
Further discussions regarding the regulatory framework for virtual assets will be managed by the Virtual Asset Committee, a body scheduled to launch under the Financial Services Commission in November.
