South Korea to regulate cross-border virtual asset transfers

South Korea’s Ministry of Economy and Finance has announced a legislative notice for an amendment to the Enforcement Decree of the Foreign Exchange Transactions Act. The amendment aims to regulate the cross-border transfer of virtual assets, including transfers between domestic and overseas exchanges or between domestic exchanges and private wallets.

Under the proposed rules, registered virtual asset transfer service providers must report transaction details to the Bank of Korea’s foreign exchange information network. This data will be shared with the National Tax Service, Korea Customs Service, Financial Supervisory Service, and the Korea Financial Intelligence Unit (FIU) to monitor for illegal transactions, such as unauthorized remittances or attempts to bypass foreign exchange regulations.

The amendment also introduces new requirements for service providers, including the necessity of specialized IT facilities and professional staff with at least two years of foreign exchange experience. Additionally, the reform reorganizes fintech-based foreign exchange services into a unified ‘overseas payment and settlement business’ category and strengthens sanctions for currency exchange businesses, including higher fines and stricter registration requirements. The amendment is expected to take effect on December 3, following the legislative notice period ending October 26.