South Korea introduces stringent pre-registration and monthly reporting requirements for businesses in cross-border crypto transactions.
By Bena Ilyas
Edited by Julia Sakovich
Updated
3 mins read
South Korea plans to strengthen its crypto regulation to address the role of digital assets in foreign exchange crimes. Minister of Economy and Finance Choi Sang-mok announced this initiative during a G20 summit in Washington, focusing on cross-border crypto transactions. The government’s goal is to combat money laundering and arbitrage linked to digital currencies.
Under the new regulations, businesses involved in cross-border transactions using stablecoins and other cryptocurrencies must pre-register with authorities. According to Edaily, they will also need to submit detailed transaction reports to the Bank of Korea monthly. The strategic move aims to create a transparent environment for digital asset transactions, making it harder for illegal activities to go unnoticed.
Multiple South Korean regulatory bodies will monitor the collected transaction data, including tax, customs, financial, and international finance authorities. This collaborative effort is designed not only to track illegal transactions but also to facilitate inspection of the patterns and methods employed in foreign exchange crimes.
According to the Korea Customs Service, cryptocurrencies have been implicated in approximately 88% of foreign exchange crimes, amounting to around 1.65 trillion won ($1.2 billion).
In order to support proposed mandates, Minister Choi announced amendments to the Foreign Exchange Transactions Act. The updates will define “virtual assets” and “virtual asset business operators”, marking them as distinct from traditional foreign exchange and other financial transactions. This legal separation sets a foundation for new reporting and monitoring rules.
The Ministry of Economy and Finance aims to finalize these legal adjustments by mid-2025, with reporting and monitoring systems expected to launch in the latter half of the year. This timeline aligns with South Korea’s careful approach to introducing crypto regulations without abrupt market disruptions.
South Korea has taken an active stance in building a regulatory framework for digital assets. In July, the country introduced investor-focused regulations to foster a safer crypto market, setting standards against fraud and promoting transparency. Building on this progress, the government plans further rules to oversee crypto issuance, distribution, and disclosures, strengthening sector credibility.
South Korea’s primary financial authority is reconsidering limits on local spot cryptocurrency ETFs and institutional access to crypto exchanges. Current rules restrict crypto activities mostly to individual traders. Proposed adjustments, however, would open the market to institutional investors, aiming to bring in more capital and boost innovation within the crypto sector.
The Ministry of Economy and Finance has not yet commented on questions about the updated regulations. Still, the government’s continued refinement of its regulatory framework reflects a deliberate balance between encouraging digital asset growth and ensuring strict oversight to combat misuse.
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With over 3 years of crypto writing experience, Bena strives to make crypto, blockchain, Web3, and fintech accessible to all. Beyond cryptocurrencies, Bena also enjoys reading books in her spare time.
